The Federal Reserve Board ("FRB") provided guidance for large domestic and foreign banking organizations on compliance with tailored prudential standards.
As previously covered, the FRB finalized rules that will tailor the application of prudential standards to U.S. bank holding companies and apply enhanced standards to certain large savings and loan holding companies. Under the newly approved framework, there will be four asset- and risk-based levels of compliance requirements for banks that have $100 billion or more in total assets. The rules will go into effect 60 days after publication in the Federal Register.
According to the FRB, the FAQs address:
- when a banking organization should choose to opt out of the requirement to include Accumulated Other Comprehensive Income (or "AOCI") in regulatory capital;
- disclosure requirements during the fourth quarter of 2019, pursuant to 12 CFR 249.90 ("Liquidity Risk Measurement Standards, Disclosures") for a holding company that is a Category IV banking organization;
- when a foreign banking organization with total U.S. assets of less than $100 billion can stop complying with initial transition requirements; and
- the interpretation of the term "quarterly" for holding companies subject to Category IV standards.
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