Featured Product

    FED Consults on Corporate Governance and Large Entity Rating System

    August 03, 2017

    FED is requesting public comments on a corporate governance proposal to enhance the effectiveness of boards of directors and on a proposal to better align its rating system for large financial institutions with the post-crisis supervisory program for these firms. Comments will be accepted for 60 days.

    The proposal on corporate governance would refocus the FED's supervisory expectations for the largest firms' boards of directors on their core responsibilities, which will promote the safety and soundness of the firms. Boards' core responsibilities include oversight of the types and levels of risk a firm may take and aligning the firm's business strategy with those risk decisions. Additionally, the proposal would reduce unnecessary burden for the boards of smaller institutions. The corporate governance proposal is made up of three parts and it:

    Identifies the attributes of effective boards of directors, such as setting a clear and consistent strategic direction for the firm, supporting independent risk management, and holding the management of the firm accountable (for the largest institutions, FED supervisors would use these attributes to inform their evaluation of a firm's governance and controls)

    Clarifies that, for all supervised firms, most supervisory findings should be communicated to the firm's senior management for corrective action, rather than to its board of directors

    Identifies existing supervisory expectations for boards of directors that could be eliminated or revised

     

    The proposal on the rating system for large financial institutions system incorporates the regulatory and supervisory changes made by FED since 2012, which focus on capital, liquidity, and the effectiveness of governance and controls, including firms' compliance with laws and regulations. The current supervisory program for the largest firms was introduced in 2012 and sets higher standards to lower the probability of a firm's failure or material distress and to reduce risks to the U.S. financial stability. The proposed changes to the rating Supervisors would assess and assign confidential ratings in each of these categories. The proposed rating system would only apply to large financial institutions, such as domestic bank holding companies and savings and loan holding companies with USD 50 billion or more in total consolidated assets as well as the intermediate holding companies of foreign banking organizations operating in the United States. Consistent with existing practice, the new rating system would not apply to insurance companies supervised by the Board. Firms with less than USD 50 billion in consolidated assets, including community banks, would continue to use the current rating system, which reflects long-standing supervisory practices for those firms.

     

    Related Links

    Proposal on Corporate Governance (PDF)

    Proposal on Rating System (PDF)

    Comment Due Date: October 01, 2017

    Keywords: Americas, United States of America, Banking, Corporate Governance, Rating System, FED

    Related Articles
    News

    ESMA Releases Enforcement Priorities for 2019 Annual Financial Reports

    ESMA published a statement on the priorities that European enforcers will consider when examining the 2019 annual financial reports of listed companies.

    October 22, 2019 WebPage Regulatory News
    News

    EC Consults on Alternative Standardized Approach for Market Risk

    EC is consulting on a delegated regulation amending the Capital Requirements Regulation (CRR) with regard to the alternative standardized approach for market risk.

    October 21, 2019 WebPage Regulatory News
    News

    CPMI Report Examines Impact of Global Stablecoins

    This report by the G7 Working Group on Stablecoins finds that stablecoins, regardless of size, have implications ranging from anti-money laundering efforts across jurisdictions to operational resilience (including for cyber security), consumer or investor and data protection, and tax compliance.

    October 18, 2019 WebPage Regulatory News
    News

    BoE Announces Date for Publication of Stress Test Results for Banks

    BoE announced its plans to publish results of the full UK annual stress tests on December 10, 2019.

    October 18, 2019 WebPage Regulatory News
    News

    US Agencies Request Comments on Use and Impact of CAMELS Ratings

    US Agencies (FDIC and FED) are seeking information and comments from interested parties regarding the consistency of ratings assigned by the agencies under the Uniform Financial Institutions Rating System (UFIRS).

    October 18, 2019 WebPage Regulatory News
    News

    PRA Consults on Approach to Supervising Liquidity and Funding Risks

    In consultation paper (CP27/19), PRA published a proposal (CP27/19) to update the supervisory statement SS24/15 on the PRA approach to supervising liquidity and funding risk.

    October 17, 2019 WebPage Regulatory News
    News

    US Agencies Consult on Policy Statement on Allowance for Credit Losses

    US Agencies (FDIC, FED, NCUA, and OCC) are consulting on the policy statement on allowances for credit losses and on the guidance on credit risk review systems.

    October 17, 2019 WebPage Regulatory News
    News

    FSI Paper Examines Use of Suptech Initiatives by Financial Authorities

    The Financial Stability Institute (FSI) of BIS published a paper that examines the suptech developments by analyzing suptech initiatives of 39 financial authorities globally.

    October 17, 2019 WebPage Regulatory News
    News

    US Agencies Publish Notice to Extend Form FFIEC 102 for Three Years

    US Agencies (FDIC, FED, and OCC) published a joint notice regarding extension of the market risk regulatory report for institutions subject to the market risk capital rule (FFIEC 102).

    October 17, 2019 WebPage Regulatory News
    News

    ECB Publishes Recommendations on Euro Risk-Free Rates Transition

    ECB published a report, by private sector working group on euro risk-free rates, which contains recommendations, from a risk management perspective, on the transition to new risk-free rates.

    October 17, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 4006