Banks Face New Obligations in Underwriting, Risk Analysis, and Management of Leveraged Lending

This Alert describes the recently issued guidance (the “Guidance”) from the U.S. banking agencies instructing regulated domestic and foreign banks, subsidiaries and affiliates on implementing an acceptable infrastructure to comply with their safety and soundness responsibilities when engaging in leveraged lending. The effective date for the Guidance is May 21, 2013.

On March 22nd, the federal banking agencies issued the Guidance, which replaces regulatory interagency guidance in effect since 2001.1 The 2001 guidance, which is somewhat simplistic by today’s standards, established a risk management obligation on the part of banking institutions engaging in “leveraged financing.” The newly issued Guidance, however, enhances the obligations established by the 2001 guidance by imposing a very robust internal set of controls for all regulated institutions, including banks, thrifts, holding companies, foreign banks operating in the U.S., and related subsidiaries and affiliates.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Pillsbury Winthrop Shaw Pittman LLP | Attorney Advertising

Written by:

more+
less-

Pillsbury Winthrop Shaw Pittman LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
×
Loading...
×
×