November 08, 2019
Federal Reserve Board invites public comment on proposal to extend by 18 months initial compliance dates for foreign banks subject to its single-counterparty credit limit rule
For release at 3:00 p.m. EST
The Federal Reserve Board on Friday invited public comment on a proposal to extend by 18 months the initial compliance dates for foreign banks subject to its single-counterparty credit limit rule. The extension would provide additional time for foreign jurisdictions' versions of the rule to become effective and would apply only to the combined U.S. operations of the foreign banks and not to any U.S. intermediate holding companies of those banks.
In June 2018, the Board finalized a rule to enhance financial stability by limiting the exposure that a large domestic or foreign bank can have to another counterparty. The rule applied those limits to both the intermediate holding company and combined U.S. operations of foreign banks. For the limits applied to combined U.S. operations, the Board's rule allows a foreign bank to comply by certifying that it meets a similar rule or standard of its home country.
To date, certain foreign jurisdictions are in the process of finalizing their rules or standards. The extension would allow additional time for foreign banks to comply with the Board's rule via certification with a similar home country rule or standard. All other parts of the Board's rule remain unchanged.
Under the proposal, the largest foreign banks need to comply by July 1, 2021, while smaller foreign banks would need to comply by January 1, 2022. Comments will be accepted for 30 days after publication in the Federal Register.
For media inquiries, call 202-452-2955.