Federal Reserve Proposes Significant Changes to Foreign Bank Prudential Framework

15 April 2019
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Key takeaways:
  • On April 8, 2019, the Federal Reserve Board (the “FRB”) proposed significant changes to the prudential framework applicable to foreign banking organizations (“FBOs”). The FRB and the Office of the Comptroller of the Currency also issued a parallel proposal focused on the applicability thresholds for regulatory capital and liquidity requirements.
  • The proposals would create three categories of prudential standards for FBOs with $100 billion or more in combined U.S. assets and their U.S. intermediate holding companies subsidiaries. The three categories are meant to correspond to the second, third and fourth categories that the FRB proposed late last year for U.S. banking organizations (see our prior analysis).
  • Although the proposals would reduce requirements in various respects, the proposals also would introduce certain requirements that are more stringent compared to those in place today.