FRB Finalizes Rules that Tailor its Regulations for Banks to More Closely Match Their Risk Profiles

Orrick - Finance 20/20
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Orrick - Structured Finance Group

On October 10, the Federal Reserve Board (FRB) finalized rules that tailor its regulations for domestic and foreign banks to more closely match their risk profiles. The rules establish a framework that sorts banks with $100 billion or more in total assets into four different categories based on several factors, including asset size, cross-jurisdictional activity, reliance on short-term wholesale funding, nonbank assets, and off-balance sheet exposure. Firms in the lowest risk category will have reduced compliance requirements, and as the risk of a firm increases and it moves into a new risk category, its requirements will increase. Release.

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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