Fed to soon weigh Dodd-Frank 'tailoring' for foreign banks with US presence

1 November 2018 8:37pm
The US Federal Reserve will soon consider proposing a scale-back of Dodd-Frank requirements for foreign banks with US footprints based on the four size and risk categories applied in the proposal Wednesday for US banks, said Michael Gibson, the Fed’s supervision and regulation chief.

These new categories augur possibly significant changes in liquidity and stress-test requirements for banks with between $100 billion and $700 billion in assets, though virtually no change for banks larger or deemed systemically important.

Overseas banks are hoping that, though dozens may have more than $700 billion in global assets, they could still win relief from particular standards such as liquidity requirements if their US operations are much smaller.

“The staff intends to present three further tailoring proposals to the board in the near future,” Gibson told the Fed board Wednesday. “The first would consider tailoring of prudential standards for the US operations of foreign banking organizations based on the categories in the proposals, taking into consideration the structures through which these foreign firms conduct business in the US.”