General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
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

Related Articles

HKMA Decides to Maintain Countercyclical Capital Buffer at 2.5%

HKMA announced that, in accordance with the Banking (Capital) Rules, the countercyclical capital buffer (CCyB) ratio for Hong Kong remains at 2.5%.

April 16, 2019 WebPage Regulatory News

EP Approves Agreement on Package of CRD 5, CRR 2, BRRD 2, and SRMR 2

The European Parliament (EP) approved the final agreement on a package of reforms proposed by EC to strengthen the resilience and resolvability of European banks.

April 16, 2019 WebPage Regulatory News

FDIC Consults on Approach to Resolution Planning for IDIs

FDIC approved an Advance Notice of Proposed Rulemaking (ANPR) and is seeking comment on ways to tailor and improve its rule requiring certain insured depository institutions (IDIs) to submit resolution plans.

April 16, 2019 WebPage Regulatory News

EP Resolution on Proposal for Sovereign Bond Backed Securities

The European Parliament (EP) published adopted text on the proposal for a regulation of the European Parliament and of the Council on sovereign bond-backed securities (SBBS).

April 16, 2019 WebPage Regulatory News

PRA Seeks Input and Issues Specifications for Insurance Stress Tests

PRA announced that it will conduct an insurance stress test for the largest regulated life and general insurers from July to September 2019.

April 15, 2019 WebPage Regulatory News

PRA Finalizes Policy on Approach to Managing Climate Change Risks

PRA published the policy statement PS11/19, which contains final supervisory statement (SS3/19) on enhancing banks’ and insurers’ approaches to managing the financial risks from climate change (Appendix).

April 15, 2019 WebPage Regulatory News

EBA Single Rulebook Q&A: First Update for April 2019

EBA published answers to nine questions under the Single Rulebook question and answer (Q&A) updates for this week.

April 12, 2019 WebPage Regulatory News

EIOPA Statement on Application of Proportionality in SCR Supervision

EIOPA published a supervisory statement on the application of proportionality principle in the supervision of the Solvency Capital Requirement (SCR) calculated in accordance with the standard formula.

April 11, 2019 WebPage Regulatory News

FED Updates Form and Supplemental Instructions for FR Y-9C Reporting

FED updated the form and supplemental instructions for FR Y-9C reporting. FR Y-9C is used to collect data from domestic bank holding companies, savings and loan holding companies, U.S intermediate holding companies, and securities holding companies with total consolidated assets of USD 3 billion or more.

April 11, 2019 WebPage Regulatory News

OSFI Finalizes Guidelines on Liquidity Adequacy and NSFR Disclosures

OSFI published the final Liquidity Adequacy Requirements (LAR) guideline and the net stable funding ratio (NSFR) disclosure requirements guideline.

April 11, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2920