The Federal Reserve Board ("FRB") approved changes to its Payment System Risk Policy relating to intraday credit that is available to U.S. branches and the agencies of foreign banking organizations ("FBOs").
The changes remove references to the Strength of Support Assessment ranking and to the financial holding company status of FBOs. The FRB also approved the adoption of alternative methods for determining (i) an FBO's eligibility for a positive net debit cap, (ii) the size of its net debit cap and (iii) an FBO's eligibility for requesting a "streamlined procedure to obtain maximum daylight overdraft capacity."
According to the FRB, the changes - which go into effect April 1, 2020 - are intended to enhance methods for determining the level of intraday credit that these branches and agencies can obtain from the Federal Reserve Banks.
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