In this report: Highlights; Overview; Risk-based Capital and Leverage (Subpart B); Liquidity (Subpart C); Single-counterparty Credit Limits (Subpart D); Risk Management (Subpart E); Stress Tests (Subparts F and G); Debt-to-Equity Ratio Limit (Subpart H); Early Remediation (Subpart I); and Conclusion.

Shortly before year-end, the Federal Reserve Board (“FRB”) proposed several rules to manage systemic risks presented by bank holding companies with consolidated assets of $50 billion or more and by nonbank financial institutions that are designated as systemically important by the Financial Stability Oversight Council (“FSOC”). The proposed regulation (the “Proposal”) would implement the mandatory portions of sections 165 and 166 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”).

The Proposal includes seven sets of requirements for the bank holding companies over the $50 billion mark and the (to-be-designated) systemically important nonbanks (collectively, the “covered companies”): (i) risk-based capital requirements and leverage limits, (ii) liquidity requirements, (iii) single-counterparty credit limits, (iv) risk management, (v) stress tests, (vi) the debt-to-equity ceiling, and (vii) early remediation. Portions of the risk management and stress test provisions extend to banking organizations with less than $50 billion but more than $10 billion in consolidated assets.