Federal Reserve Board proposes risk-based prudential standards

On November 29, 2018, the Federal Reserve Board published for public comment a Notice of Proposed Rulemaking that would reorganize the current prudential standards regulatory framework for US banking organizations deemed to be of systemic risk into four separate categories to reflect their risk profiles. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”), banking organizations with total consolidated assets of $50 billion or more were deemed by statute to be a risk to the financial stability of the US financial system and are subject to a series of regulatory requirements imposed by the Federal Reserve Board, including stress testing, liquidity risk management, capital buffers, risk committee and enhanced risk management and single counterparty credit limits. On May 24, 2018, the President signed Public Law 115-174, the “Economic Growth, Regulatory Relief, and Consumer Protection Act” (“EGRRCPA”) which…

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