November 21, 2018

FED finalized the new supervisory rating system for Large Financial Institutions (LFIs), to better align with the current supervisory programs and practices for these firms. Additionally, FED published a notice stating that it will apply the RFI/C(D) rating system to certain savings and loan holding companies (SLHCs). SLHCs with USD 100 billion or more in assets will receive ratings under the RFI/C(D) rating system until FED applies the LFI rating system to them. Under the RFI rating system, BHCs are assigned individual component ratings for risk management (R), financial condition (F), and impact (I) of nondepository entities on subsidiary depository institutions. The final rule on LFI rating system and the application of the RFI/C(D) rating system to SLHCs will become effective from February 01, 2019.

The LFI rating system applies to bank holding companies and non-insurance, non-commercial savings, and loan holding companies with total consolidated assets of USD 100 billion or more, which is a change from the originally proposed USD 50 billion threshold. It will also apply to the U.S. intermediate holding companies of foreign banking organizations established under Regulation YY with total consolidated assets of USD 50 billion or more, as proposed. The rating system introduces a new rating scale and will assign component ratings for capital planning and positions, liquidity risk management and positions, and governance and controls. FED will assign initial ratings under the new system in 2019 for bank holding companies and U.S. intermediate holding companies subject to the Large Institution Supervision Coordinating Committee framework and in 2020 for all other large financial institutions. FED is also revising provisions in Regulation K and Regulation LL to ensure consistency with certain features of the new rating system.

FED will continue to apply the existing rating system for bank holding companies with less than USD 100 billion in total consolidated assets. The existing rating system will also be adopted for non-insurance, non-commercial savings, and loan holding companies with less than USD 100 billion in total consolidated assets.

 

Related Links

Effective Date: February 01, 2019

Keywords: Americas, US, Banking, Rating System, LFI Rating System, RFI Rating System, FED

Related Articles
News

APRA Releases Minor Changes to Reporting Standards on SA-CCR for Banks

APRA released minor changes to the three reporting standards for the standardized approach for measuring counterparty credit risk exposures (SA-CCR).

May 22, 2019 WebPage Regulatory News
News

APRA Proposes to Amend Guidance on Residential Mortgage Lending

APRA is consulting on revisions to the prudential practice guide APG 223 on residential mortgage lending in Australia.

May 21, 2019 WebPage Regulatory News
News

ESAs Amend Technical Standards on Mapping of ECAIs Under CRR

ESAs published a second amendment to the implementing technical standards on the mapping of credit assessments of External Credit Assessment Institutions (ECAIs) for credit risk under the Capital Requirements Regulation (CRR).

May 20, 2019 WebPage Regulatory News
News

OCC Consults on Information Collection for Home Mortgage Disclosures

OCC is soliciting comment on the revision of the information collection titled “Regulation C—Home Mortgage Disclosure.” OCC also notes that it has sent the collection to OMB for review.

May 20, 2019 WebPage Regulatory News
News

EIOPA Updates Q&A on Regulations in May 2019

EIOPA published additional questions and answers (Q&A) on guidelines, directives, and regulations applicable to insurers in Europe.

May 17, 2019 WebPage Regulatory News
News

FSB Publishes Update on Meeting of RCG for Americas

FSB published a summary of the meeting of its Regional Consultative Group (RCG) in Americas.

May 17, 2019 WebPage Regulatory News
News

ESRB Paper on Impact of Business Model Similarities on Risk Capture

ESRB published a working paper on whether information contagion and business model similarities explain bank credit risk commonalities.

May 17, 2019 WebPage Regulatory News
News

CBM Notifies ESRB and ECB on Imposing Borrower-Based Measures in Malta

CBM notified ESRB and ECB regarding its decision to impose borrower-based measures on lenders in Malta.

May 17, 2019 WebPage Regulatory News
News

IASB Issues Work Plan and Meeting Updates for May 2019

IASB published an updated work plan, along with the update of its meeting in May 2019.

May 17, 2019 WebPage Regulatory News
News

FCA Publishes Its Business Plan for the Coming Year

FCA published its Business Plan, which sets out the main areas of focus and priorities for 2019/20.

May 17, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3103