High Quality Liquid Assets

This is not about top-shelf liquor, it is about today’s notice of proposed rulemaking…. At an open meeting today, the Federal Reserve Board (“FRB”) approved a proposed rule implementing a liquidity coverage ratio (“LCR”) requirement (the “Proposed Rule”), written jointly with the Office of the Comptroller of the Currency (“OCC”) and the Federal Deposit Insurance Corporation (“FDIC,” and collectively, with the FRB and the OCC, the “Agencies”). With certain exceptions noted below, the Proposed Rule is broadly consistent with the Basel Committee on Banking Supervision’s LCR standard (the “Basel LCR Standard”) issued in 2010. We will supplement this alert with a more detailed analysis in the coming days.

Coverage -

The Proposed Rule would generally apply to internationally-active banking organizations with $250 billion or more in total consolidated assets or $10 billion or more in on-balance sheet foreign exposure, as well as designated nonbank systemically important financial institutions that do not have substantial insurance operations (“Covered Companies”). The FRB would also apply a modified, less stringent LCR requirement to depository institution holding companies that are not internationally-active, but have more than $50 billion in total consolidated assets.

Please see full alert below for more information.

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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.

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