On June 14, the Federal Reserve issued a final rule to impose single counterparty credit limits on large bank holding companies and large foreign banking organizations with respect to their U.S. operations, pursuant to Section 165(e) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Vice Chair for Supervision Quarles stressed in his Opening Statement that the final rule is “a useful complement to the principal protection against contagion: the robust capital and liquidity positions of the financial system today.” The final rule is the latest statutorily mandated enhanced prudential standard to be implemented and reflects a significant evolution in approach since it was first proposed in 2011. As initially proposed, the methodologies for measuring credit exposures were largely insensitive to risk and would have been a binding constraint on covered companies’ transactions. The rule as re-proposed in 2016, which followed the finalization of the Basel Large Exposure Framework in 2014 and incorporated many of its elements, introduced greater risk-sensitivity but also significant compliance complexity from its proposed broad and subjective definitions of both covered companies and their counterparties, as well as its approach to assessing the interconnections among counterparties. The final rule extends the 2016 proposed rule’s risk sensitivity to permit measurement of exposure from securities financing transactions under internal models and eases compliance burdens by using more objective and transparent standards—importantly by replacing traditional banking law control tests with accounting consolidation as the standard for aggregating exposures of multiple entities to a single counterparty or group of connected counterparties. The final rule requires U.S. BHCs and FBOs that are G-SIBs and major IHCs to comply by January 1, 2020 and requires all other covered firms to comply by July 1, 2020, providing compliance periods of 18 months and 2 years, respectively. The release of the final rule was accompanied by a proposed reporting form on which the Federal Reserve is soliciting comment.