Federal Reserve Issues Tailoring Proposals for Foreign Banking Organizations and Resolution Planning Requirements

On April 8, 2019, the Board of Governors of the Federal Reserve System (“FRB”) issued proposals to tailor (i) the enhanced prudential standards that apply to larger foreign banking organizations (“FBOs”) and (ii) the resolution planning requirements that apply to larger FBOs and larger US bank and holding companies. These proposals are part of FRB’s broader effort to implement the 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act.

This Legal Update (i) describes at a high level the background to FRB’s tailoring proposals, (ii) explains FRB’s proposed approach to categorizing larger FBOs, (iii) outlines the prudential standards that FRB expects to apply to each category of FBO, (iv) describes how FRB and the FDIC propose to tailor the resolution planning requirements for larger banking organizations and (v) presents our initial takeaway on the proposals.