Regulatory Tailoring: Federal Bank Regulators Propose Significant Revisions to the Application of Prudential Standards for Foreign Banking Organizations, Seek Comment on Whether to Impose Standardized Liquidity Requirements on Their U.S. Branches and Agencies, and Propose Significant Revisions to Resolution Planning Requirements

Sullivan & Cromwell LLP - April 8, 2019
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Earlier today, the Federal Reserve, by a vote of 4-1, adopted two proposed rules that would tailor how certain aspects of the post-crisis bank regulatory framework, including certain capital and liquidity requirements and other prudential standards, apply to the U.S. operations of foreign banking organizations.  One of the proposed rules is to be issued jointly by the Federal Reserve, OCC, and FDIC.  The other was issued solely by the Federal Reserve.  The Federal Reserve also adopted, by a vote of 4-1, a proposal to be jointly issued with the FDIC that would revise the resolution planning requirements for FBOs and U.S. bank holding companies.

Notably, Governor Brainard issued a separate Statement in which she declined to support the proposals.  The principal source of her disagreement was that the proposals did not include liquidity requirements for the U.S. branches and agencies of FBOs.  Governor Brainard also expressed concern about the reduction in resolution plan filing requirements.