In this newsletter, we provide a snapshot of the principal US, European and global financial regulatory developments of interest to banks, investment firms, brokerdealers, market infrastructure providers, asset managers and corporates.
Bank Prudential Regulation & Regulatory Capital
US Federal Deposit Insurance Corporation Holds Meeting of the Systemic Resolution Advisory Committee
On April 14, 2016, the US Federal Deposit Insurance Corporation's Systemic Resolution Advisory Committee held a meeting to discuss the latest updates and advice on issues related to the resolution of systemically important financial companies pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act. At the meeting, the committee covered topics including, the "living will" updates, orderly liquidation updates, and developments in resolution planning in the European Union.
The agenda for the Systemic Resolution Advisory Committee meeting is available at:
https://www.fdic.gov/about/srac/2016/2016-04-14_agenda.html.
US Treasury Department's Office of Financial Research Releases Brief Regarding Global Systemically Important Banks
On April 13, 2016, the US Treasury Department's Office of Financial Research published a paper analyzing data on global systemically important banks, based on data released in 2013 and 2014 by the Basel Committee on Banking Supervision. The OFR research report analyzed data regarding 30 banks across the world identified by the Basel Committee as G-SIBs, including eight US bank holding companies. The analysis found, among other things, an increase in the systemic importance scores by Chinese banks, while the systemic importance scores of US G-SIBs generally reflected little change and continued to be among the highest amongst global banks.
The full text of the OFR report is available at: https://financialresearch.gov/briefs/files/OFRbr_2016-03_Systemic-Importance-Data-Shed-Light-on-Global-Banking-Risks.pdf.
US Government Accountability Office Issues Report on Resolution Plan Review Process by US Regulators
On April 12, 2016, the US Government Accountability Office issued a report on the resolution plan review processes developed by the US Federal Deposit Insurance Corporation and the US Board of Governors of the Federal Reserve System. The report found that, although the resolution plan rule has improved the resolvability of large systemically important financial companies in the United States, the lack of transparency by US regulators regarding how the regulators assess and review plans could undermine public and market confidence in resolution plans. Along with these findings, the GAO report issued a series of recommendations to improve the resolution review process. Among other recommendations, the GAO report encouraged the FDIC and Federal Reserve to publicly disclose information about their respective processes for assessing the credibility of resolution plans and revising the resolution plan rule's filing requirements in order to provide companies with more time to respond to feedback and guidance from the regulators on their resolution plans.
The full text of the GAO report is available at: http://www.gao.gov/assets/680/676497.pdf.
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