Featured Product

    US Agencies Seek Input on Liquidity Risk, Lev Lending & Digital Assets

    May 23, 2022

    The Office of the Comptroller of the Currency (OCC) published Federal Register notices seeking comments on the renewal of information collections titled “Funding and Liquidity Risk Management” and “Leveraged Lending.” Additionally, the Department of Commerce is requesting public input to inform the development of the framework for digital asset technologies.

    The information collection on funding and liquidity risk management relates to the policy on funding and liquidity risk management, which summarizes the principles of sound liquidity risk management, which the Federal banking agencies have issued in the past. The policy statement harmonizes the principles for sound liquidity risk management and supervision, issued by the Basel Committee on Banking Supervision. Section 20 of the policy statement states that liquidity risk reports should provide aggregate information with sufficient supporting detail to enable management to assess the sensitivity of the institution to changes in market conditions, its own financial performance, and other important risk factors. Institutions should report on the use and availability of government support, such as lending and guarantee programs, and implications on liquidity positions, particularly because these programs are generally temporary or reserved as a source for contingent funding. The policy statement describes supervisory expectations for all depository institutions, including banks, savings associations, and credit unions, with the number of respondents to this occasional information collection estimated at 1,069. The comment period for this information collections ends on June 22, 2022.

    The information collection on leveraged lending relates to the guidance from certain supervisory agencies to the financial institutions they supervise on how to evaluate and monitor credit risks in leveraged loans, understand the effect of changes in borrowers' enterprise values on credit portfolio quality, and assess the sensitivity of future credit losses to these changes in enterprise values. The final guidance recommends that financial institutions consider developing underwriting policies for leveraged lending, including stress-testing procedures for leveraged credits; risk management policies, including stress-testing procedures for pipeline exposures; and policies and procedures for incorporating the results of leveraged credit and pipeline stress tests into the firm's overall stress-testing framework. Although these are not legal requirements, the recommended policies qualify as “collections of information” as defined in the Paperwork Reduction Act of 1995. Respondents to this annual information collection are financial institutions with leveraged lending activities as defined in the guidance that may develop policies recommended in the guidance. The number of respondents for this information collection is estimated at 30 and the comment period for this information collections will on June 21, 2022.

    Notice on developing framework for digital asset technologies. In March 2022, the U.S. President Joseph R. Biden Jr. signed an Executive Order on ensuring responsible development of digital assets. The Order outlines U.S. policy objectives with respect to digital assets, including but not limited to protecting consumers, investors, and businesses; mitigating systemic financial risk; mitigating the illicit finance and national security risks posed by misuse of digital assets; and supporting technological advancements that promote responsible development and use of digital assets. Section 8(b)(iii) of the Executive Order directs the Secretary of Commerce to establish a framework for enhancing U.S. economic competitiveness in, and leveraging of, digital asset technologies. Through this notice, the Department of Commerce is requesting input from the public to inform work in developing the scope of the framework. The Department of Commerce is requesting input on any or all of the questions specified in the notice. The questions are related to competitiveness, comparisons to traditional financial services and financial inclusion considerations, and technological development. The comment period on this notice will end on July 05, 2022.


    Related Links



    Keywords: Americas, US, Banking, Leveraged Lending, Liquidity Risk, Basel, Information Collection, Reporting, Credit Risk, Lending, Digital Assets, Regtech, Fintech, OCC, Department of Commerce

    Featured Experts
    Related Articles

    FINMA Approves Merger of Credit Suisse and UBS

    The Swiss Financial Market Supervisory Authority (FINMA) has approved the takeover of Credit Suisse by UBS.

    March 21, 2023 WebPage Regulatory News

    BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks

    The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.

    March 13, 2023 WebPage Regulatory News

    OSFI Finalizes on Climate Risk Guideline, Issues Other Updates

    The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.

    March 12, 2023 WebPage Regulatory News

    APRA Assesses Macro-Prudential Policy Settings, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) published an information paper that assesses its macro-prudential policy settings aimed at promoting stability at a systemic level.

    March 07, 2023 WebPage Regulatory News

    BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending

    BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.

    March 03, 2023 WebPage Regulatory News

    HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks

    The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.

    March 02, 2023 WebPage Regulatory News

    MFSA Sets Out Supervisory Priorities, Issues Reporting Updates

    The Malta Financial Services Authority (MFSA) outlined its supervisory priorities for 2023

    March 02, 2023 WebPage Regulatory News

    German Regulators Issue Multiple Reporting Updates for Banks

    Deutsche Bundesbank published the nationally deactivated validation rules for the German Commercial Code (HGB) users on the taxonomy 3.2, which became valid from December 31, 2022

    March 02, 2023 WebPage Regulatory News

    BCBS Report Examines Impact of Basel III Framework for Banks

    The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.

    February 28, 2023 WebPage Regulatory News

    PRA Consults on Prudential Rules for "Simpler-Regime" Firms

    Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.

    February 28, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8806