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FIRMA FORUM Magazine
This the feature article from our Issue #1, 2012 FIRMA FORUM Newsletter. Members can view the entire issue, and past issues, in our archive
Seven Takeaways from New Prudential Rules Issued by the Federal Reserve
Seven Takeaways from New Prudential Rules Issued by the Federal Reserve
By Dolores Atallo
The Federal Reserve recently released a long-awaited set of proposed prudential rules, as required by the Dodd-Frank Act. These new proposed
rules are far-reaching and introduce a host of new legal requirements for
bank holding companies with assets of more than $50 billion and nonbank financial institutions to be designated as systemically important financial institutions, whose failure federal regulators may feel could threaten the financial system. It's also worth noting that there are two proposed provisions – risk management and stress testing – that will affect bank holding companies and nonbank financial institutions with assets greater than $10 billion.
The Federal Reserve is seeking feedback on the proposed rules from bank holding companies and nonbank financial institutions (there is a 90-day period to answer embedded questions) regarding how the potential application of these proposed rules will affect them. The Federal Reserve has also indicated that it will release rules on foreign banks with U.S. operationsat a later, unspecified date.
For top banking executives looking for a big-picture view before diving into the full set of rules, we've taken
a look at them and identified seven points to consider.