Featured Product

    FED Issues the Final Regulation on SCCL for Large Banks

    August 06, 2018

    FED published, in Federal Register, the final rule to establish the single-counterparty credit limits (SCCL) for banks. The applicable entities include bank holding companies and foreign banking organizations with USD 250 billion or more in consolidated assets, including any U.S. intermediate holding company of such a foreign banking organization with USD 50 billion or more in consolidated assets, along with any bank holding company identified as a global systemically important bank holding company (G-SIB) under the capital rules of FED. The final rule will be effective from October 05, 2018. FED also issued a proposal to implement a new information collection, the SCCL (FR 2590; OMB No. 7100-NEW) and the associated notice requirements in connection with the final SCCL rule. Comments must be submitted by October 05, 2018.

    The final rule, which implements a part of the Dodd-Frank Act, is generally similar to the proposed rule that was issued in March 2016 and applies credit limits that increase in stringency as the systemic footprint of a firm increases. A G-SIB would be limited to a credit exposure of no more than 15% of its tier 1 capital to another systemically important financial firm, reflecting FED's analysis of the increased systemic risk posed when the largest firms have significant exposure to one another. A bank holding company with USD 250 billion or more in consolidated assets would be restricted to a credit exposure of no more than 25% of its tier 1 capital to a counterparty. Foreign banks operating in the United States with USD 250 billion or more in global consolidated assets, along with their intermediate holding companies with USD 50 billion or more in U.S. consolidated assets, would be subject to similar limits. 

    In response to comments, the final rule reduces regulatory burden by using common accounting definitions to simplify application of exposure limits. In addition, a foreign bank's combined U.S. operations, though not its U.S. intermediate holding company, will be considered in compliance with the final rule if a comparable rule is in effect in the foreign bank's home country. G-SIBs will be required to comply by January 01, 2020 and all other firms are required to comply by July 01, 2020. This rule is intended to prevent concentrations of risk between large banking organizations and their counterparties from undermining financial stability. 

     

    Related Links

    Comment Due Date: October 05, 2018 (FR 2590)

    Effective Date: October 05, 2018 (Final Rule)

    Keywords: Americas, US, Banking, Reporting, SCCL, FR 2590, Credit Exposures, Systemic Risk, G-SIB, FED

    Featured Experts
    Related Articles
    News

    FSB Sets Out Effective Practices for Cyber Incident Recovery

    FSB finalized the toolkit of effective practices to assist financial institutions in their cyber incident response and recovery activities.

    October 19, 2020 WebPage Regulatory News
    News

    HKMA Urges Early Action for Adherence to IBOR Fallbacks Protocol

    HKMA urged authorized institutions to take early action to adhere to the IBOR Fallbacks Protocol, which ISDA is expected to publish soon.

    October 16, 2020 WebPage Regulatory News
    News

    FSB Sets Out Roadmap for Transition to Alternative Reference Rates

    FSB published a global transition roadmap for London Inter-bank Offered Rate (LIBOR).

    October 16, 2020 WebPage Regulatory News
    News

    HM Treasury Publishes Response to Proposal on BRRD2 Transposition

    HM Treasury published a document that summarizes the responses received from a consultation on the approach of UK to transposition of the revised Bank Resolution and Recovery Directive (BRRD2).

    October 15, 2020 WebPage Regulatory News
    News

    HM Treasury Publishes Response to Proposal on CRD5 Transposition

    HM Treasury published the government response to the feedback received on the consultation for updating the prudential regime of UK before the end of the Brexit transition period.

    October 15, 2020 WebPage Regulatory News
    News

    BoE Publishes Reporting Schedule for Statistical Returns

    In a recent statistical notice, BoE announced publication of the reporting schedule for statistical returns for 2021.

    October 15, 2020 WebPage Regulatory News
    News

    EC Welcomes Declaration by Member States on EU Cloud Federation

    EC welcomed the joint declaration by 25 EU member states on building the next generation of cloud in Europe.

    October 15, 2020 WebPage Regulatory News
    News

    MAS Amends Notice on Issuance of Covered Bonds by Banks in Singapore

    MAS published amendments to Notice 648 on the issuance of covered bonds by banks incorporated in Singapore.

    October 15, 2020 WebPage Regulatory News
    News

    FDIC Selects Technology Companies for Rapid Prototyping Competition

    FDIC has selected 14 technology companies—including Accenture Federal Services, LLC, Fed Reporter, Inc, and S&P Global Market Intelligence, LLC—for inclusion in the next phase of the rapid prototyping competition.

    October 15, 2020 WebPage Regulatory News
    News

    GLEIF Defines New Validation Agent Role for Financial Institutions

    GLEIF announced that financial institutions worldwide can realize a variety of cost, efficiency, and customer experience benefits by assuming a new “validation agent” role within the Global Legal Entity Identifier (LEI) System.

    October 15, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5979