SIFMA and The Financial Services Forum sent comments to the Board of Governors of the Federal Reserve System (the “FRB”)…
Chief Counsel’s Office
Office of the Comptroller of the Currency
400 7th Street, SW, Suite 3E‐218
Washington, D.C. 20219
Ann E. Misback, Secretary
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, NW
Washington, D.C. 20551
Robert E. Feldman, Executive Secretary
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington D.C. 20429
Re: Supplemental Comments on the Final Tailoring Rules
Ladies and Gentlemen:
The Bank Policy Institute, the Institute of International Bankers, the Securities Industry and Financial Markets Association, and the American Bankers Association (collectively, the “Associations”)1 are writing to provide additional comments and requests for clarification with respect to the final tailoring rules issued by the Board of Governors of the Federal Reserve System (with respect to the final rule tailoring the application of enhanced prudential standards)2 and by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (with respect to the interagency final rule tailoring the application of capital and standardized liquidity requirements).3 In this letter we provide a number of recommendations that would allow the agencies to better achieve the objectives of the final rules, including the use of the adopted risk‐based indicators for the initial categorizations of all banking organizations, as well as greater efficiency, simplicity and clarity in regulation.
I. In order to have initial categorizations for all banking organizations reflect the risk‐based indicators that the agencies adopted, U.S. IHCs should be permitted to calculate their initial cross‐jurisdictional activity indicator using the FR Y‐15 filing as of June 30, 2020.
Under the final rules, the risk‐based indicator for cross‐jurisdictional activity is a key threshold. A firm with average cross‐jurisdictional activity of $75 billion or more will be categorized as a Category II firm under the final rules and, therefore, subject to the most stringent standards applicable to firms that are not U.S. GSIBs. Category II standards generally include capital and standardized liquidity requirements based on the Basel Committee’s standards, as well as more stringent enhanced prudential standards.