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The central bank unveiled a 173-page proposal on Tuesday detailing how it will regulate systemically important banks and nonbanks. While the plan offered a lot of specifics, some burning questions, including how much certain firms will pay as a capital surcharge, were left unanswered.
December 20 -
The central bank on Tuesday released a 173-page proposal governing how it plans to supervise systemically important banks and nonbanks. The plan covers everything from capital requirements to stress tests.
December 20
WASHINGTON — The Federal Reserve Board said Friday it will give the industry more time to weigh in on a batch of rules that will impact how much capital banks must hold.
Comments were initially due by the end of March, but have now been extended until April 30, 2012.
"The Board extended the comment period to allow interested persons more time to analyze the issues and prepare their comments," according to a release by the agency.
In late December, the Fed laid out a proposal on how it would regulate the largest U.S. banks, including provisions on new capital and liquidity requirements mandated by the Dodd-Frank Act.
The rules will apply to all bank holding companies with more than $50 billion in assets as well nonbank financial firms designated as systemically important by the Financial Stability Oversight Council.
The plan touched on several critical areas governing bank regulation, including risk-based capital and leverage requirements, resolution planning and concentration limits.
The proposal also outlined requirements for stress-testing, which would require institutions to use three economic and financial-market scenarios to assess how they would respond to a crisis. Aspects of the stress tests will be made public.
Under the proposal, firms would also have to limit credit exposure to single counterparties.
Separately, the central bank has proposed early remediation requirements in order to address any financial weakness at large companies. Regulators have listed a number of triggers for remediation including capital levels, results of stress tests and risk-management weakness.
