Clifford Chance

Federal Reserve Board Adopts Final Rule Implementing Enhanced Prudential Standards for US Operations of Non-US Banks

20 February 2014

On February 18, 2014, the Federal Reserve Board approved the publication of a final rule implementing certain of the enhanced prudential standards required for large US bank holding companies and non-US banks ("foreign banking organizations" or "FBOs") under Section 165 of the Dodd-Frank Act.  The final rule establishes a US intermediate holding company ("IHC") requirement for FBOs with $50 billion or more in US non-branch assets and imposes enhanced risk-based and leverage capital requirements and enhanced liquidity risk management, stress test and buffer requirements on all FBOs with consolidated worldwide assets of $50 billion or more.  In addition, the final rule establishes capital stress test requirements for FBOs with consolidated worldwide assets of $10 billion or more and US risk committee requirements for FBOs meeting the $10 billion threshold that are publicly traded.  Foreign banking organizations will be subject to the requirements of the final rule beginning on July 1, 2016.

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