Michael Escue Authors Article in New York Law JournalJuly 23, 2012
On July 23, Mr. Escue authored the article, “OCC and Federal Reserve Diverge on Calculations of Credit Exposure,” in the New York Law Journal. The article discussed the OCC’s interim final rule, which implements the changes stipulated by Section 610 of the Dodd-Frank Act over national bank lending limits and credit exposure. Both the OCC and Federal Reserve are required to define “credit exposure” as it relates to derivatives transactions and securities financing transactions with the purpose of addressing concentration risk. While the OCC’s Lending Limit Release has proposed a more flexible stance toward defining “credit exposure,” the Federal Reserve Proposed SCCL Rule suggests a more stringent, risk-intensive measure that could potentially cause serious disruptions in the derivatives and securities financing markets. The article proceeds to discuss the significant distinctions between the OCC’s Lending Limit Release and the Federal Reserve’s Proposed SCCL Rule.