The Board of Governors of the Federal Reserve System ("FRB") approved a final rule to implement single-counterparty credit limits for U.S. bank holding companies and foreign banking organizations operating in the United States with $250 billion or more in total global consolidated assets. The limits will also apply to any global systemically important banks ("GSIBs"), as well as any foreign banking organizations' U.S. intermediate holding company with $50 billion in total consolidated assets. The final rule remains generally similar to the most recent proposal. In response to concerns regarding regulatory burdens, the final rule uses common accounting definitions to simplify applications of the exposure limits.
The final rule will become effective 60 days after its publication in the Federal Register. GSIBs will be required to comply with the final rule on January 1, 2020, while all other covered companies will have until July 1, 2020 to comply.
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