On Friday, December 14, the US Federal Reserve Board proposed new rules that would implement the “enhanced supervision” requirements in Sections 165 and 166 of the Dodd-Frank Wall Street Reform and Consumer Protection Act for foreign banks with US operations.
The proposed regulations would apply to enhanced capital, liquidity, single counterparty exposure, risk management, stress testing and other requirements to foreign banks based on similar requirements that the Federal Reserve previously proposed for large domestic bank holding companies. They also would require many foreign banks to substantially alter their form of organization in the United States by mandating that all operations not currently conducted in branch or agency offices be placed under a single intermediate US holding company structure subject to the section 165 requirements.
Most of the proposed requirements will apply to foreign banking organizations with a large US banking presence and total global consolidated assets of $50 billion or more. However some of the requirements will apply at lower thresholds and, in some instances, additional standards will be required of foreign banks that have only branch or agency operations in the United States.
Please join us as Mayer Brown partners Scott Anenberg, Tom Delaney and David Sahr discuss the key aspects of this latest 300-page proposal including:
- How to determine which requirements apply to which foreign banks
- The single US intermediate holding company requirement and the potential impact on existing organizational structures
- Expanded liquidity and other requirements for US branches and agencies of large foreign banks
- The implications for large domestic bank holding companies
- The issues that may usefully be addressed in public comments
Mayer Brown’s Global Financial Markets Initiative helps clients deal with the legal and business challenges resulting from the ongoing turbulence in worldwide financial markets. By mobilizing the firm’s global resources from multiple practices and offices, the Initiative provides clients with knowledgeable and timely counsel on a broad spectrum of their legal needs.