More time to comply with last year’s single-counterparty credit limits rule would apply to a foreign banking organization’s (FBO) combined U.S. operations under a Federal Reserve Board proposal slated for publication in the Federal Register Wednesday.
The final rule, issued in the summer of 2018, is aimed at preventing concentrations of risk between large banking organizations and their counterparties from undermining financial stability. The Fed now proposes to revise the initial compliance deadlines applicable to an FBO’s combined U.S. operations only to July 1, 2021, and Jan. 1, 2022.
The 2018 rule provided initial compliance deadlines of July 1, 2020, for covered foreign entities that are not major FBOs or major U.S. intermediate holding companies (IHCs); and Jan. 1, 2020, for major FBOs and major U.S. IHCs.
“The Board is not proposing at this time any amendment that would modify the initial compliance dates in the final rule for, or otherwise amend the application of, single-counterparty credit limits applicable to any U.S. intermediate holding company of a foreign banking organization,” the Fed said in its notice of proposed rulemaking.
The proposal will be out for a 30-day comment period.
RR: Fed Board finalizes rule on single-counterparty credit limits for banking firms (June 14, 2018)