Joint Trades on Guidance for Resolution Plan Submissions of Certain FBOs
Summary
SIFMA and joint trades provided comments to the Federal Reserve System and the Federal Deposit Insurance Corporation regarding feedback on proposed guidance for the 2021 and subsequent resolution plan submissions by certain foreign banking organizations (“FBOs”). 2
Excerpt
Via electronic mail
Ann E. Misback, Secretary
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue NW
Washington, DC 20551
Executive Secretary, Attention: Comments
Federal Deposit Insurance Corporation
550 17th Street NW
Washington, DC 20429
Re: Guidance for Resolution Plan Submissions of Certain Foreign-Based Covered Companies (FRB Docket No. OP-1699: FDIC RIN 3064-ZA15)
Ladies and Gentlemen:
The Bank Policy Institute, American Bankers Association and Securities Industry and Financial Markets Association 1 appreciate the opportunity to respond to the request from the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation for feedback on proposed guidance for the 2021 and subsequent resolution plan submissions by certain foreign banking organizations (“FBOs”). 2
We respectfully request that the Agencies reconsider the approach that they have taken in preparing the Proposed Guidance. The Proposed Guidance extends to the relevant FBOs (the “Specified FBOs”)3 a framework that was developed for U.S. global systemically important financial institutions (“GSIBs”). We believe that this GSIB method 2 approach is inappropriate for FBOs and leads to distorted and incorrect results, which we discuss extensively in this letter, including Appendix 1.