Proposed Changes to Large Firm Prudential Framework

5 December 2018
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  • On October 31, 2018, the Federal Reserve Board (the “FRB”) and the other federal banking agencies issued two proposals that would modify the prudential framework for U.S. banking organizations with $100 billion or more in total consolidated assets.
  • The first proposal, issued jointly by the federal banking agencies (the “capital and liquidity thresholds proposal”), would change the thresholds for the application of various regulatory capital and liquidity standards. The second proposal (the “enhanced prudential standards proposal”), issued by the FRB, would revise the enhanced prudential standards framework implemented under the Dodd-Frank Act. The comment deadline for the proposals is January 22, 2019.
  • The proposals do not address the prudential framework for foreign banking organizations. The FRB has indicated that a separate proposal for foreign banking organizations is forthcoming in early 2019.