On June 19, the Federal Reserve adopted a final rule that sets overall single counterparty credit limits for global systemically important banking entities (GSIBs) and US bank holding companies with at least $250 billion in total consolidated assets.

The new rule implements section 165(e) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which requires the Federal Reserve to impose limits on the amount of credit exposure that such a bank holding company or foreign banking organization can have to an unaffiliated company in order to reduce the risks arising from the company’s failure.
Continue Reading Federal Reserve Adopts Final Rule for Single Counterparty Credit Limit

On May 3, the Board of Governors of the Federal Reserve System (Board) reviewed a draft rule proposal that would require any US bank holding company identified as a global systemically important banking organization (GSIB), its subsidiaries and the US operations of any foreign GSIB (Covered Entities) to comply with new restrictions regarding non-cleared qualified financial contracts (QFCs).The Board currently estimates that the proposed rule would apply to 29 banking organizations, including eight US holding companies and approximately 21 foreign banking organizations.
Continue Reading Federal Reserve Board Proposes Restrictions on Qualified Financial Contracts Used by Systemically Important Banking Organizations

The Federal Reserve Board on July 20 approved a final rule requiring the largest, most systemically important US bank holding companies to further strengthen their capital positions. Under the rule, a firm that is identified as a global systemically important bank (GSIB) holding company will have to hold additional capital “to increase its resiliency in light of the greater threat it poses to the financial stability of the United States.”
Continue Reading Federal Reserve Issues Final Rule Requiring GSIBs to Bolster Capital