Board of Governors of the Federal Reserve System |
Department of the Treasury
FEDERAL RESERVE AND TREASURY DEPARTMENT ANNOUNCE FINAL RULE ON ALTERNATIVE TO RATED DEBT REQUIREMENT FOR FINANCIAL SUBSIDIARIES
The Federal Reserve Board and the Secretary of the Treasury today announced their approval of a final rule establishing the alternative criteria that certain large banks may satisfy in order to control a financial subsidiary under the Gramm-Leach-Bliley Act.
Under the act, a national or state member bank ranked among the largest 50 insured banks may control a financial subsidiary only if the bank meets certain criteria, including having an issue of highly rated debt outstanding. The next 50 largest insured banks may control a financial subsidiary if they satisfy this debt rating requirement or an alternative comparable requirement jointly established by the Treasury and the Federal Reserve Board. Under the final rule, a bank meets the alternative requirement if it has a current long-term issuer credit rating from a nationally recognized statistical rating organization that is within the three highest investment-grade categories used by the rating organization.
The final rule will become effective 30 days after publication in the Federal Register. It is substantively identical to an interim rule issued March 14, 2000.
A joint notice is attached.
2001 Banking and consumer regulatory policy