Federal banking agencies release statement on Dodd-Frank company-run stress tests. The Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC) and Board of Governors of the Federal Reserve System (FRB) issued a joint release recapping the disclosure requirements for annual stress tests conducted by medium-sized financial companies that have total consolidated assets between US$10 billion and US$50 billion. Pursuant to the Dodd-Frank Act, these companies must disclose information used in their stress tests, including the methodologies used; loss, revenue, and net income estimates; post-stress capital ratios; and the reasons why changes exist in regulatory capital ratios. Stress test results must be disclosed by the companies between June 15 and June 30. (6/2/2015) Joint release.
FSOC records defining “systemically important” ordered by US House.According to a report in Bloomberg, US House Financial Services Committee chair, Representative Jeb Hensarling, and the heads of five of the subcommittees, sent a letter to the Financial Stability Oversight Council (FSOC) requesting the non-public records related to the process of designating companies as systemically important. (5/29/2015) FSOC.
FRB will extend high-quality liquid asset status to some state and municipal bonds. The FRB has proposed a rule that would recognize certain general obligation state and municipal bonds meeting the same liquidity criteria applied to corporate debt securities as high-quality liquid assets and may be used by banks to satisfy Liquidity Coverage Ratio (LCR) requirements. Comments on the proposed rule are due by July 24, 2015. (5/21/2015) FRB press release.
FSOC approves 2015 Annual Report. The FSOC has approved its 2015 annual report. Highlights from the report’s findings include the remaining risk of fire sales of collateral deployed in repo transactions; relief from the perceptions of government support for complex financial institutions through the implementation of the orderly liquidation authority and enhanced prudential standards; and remaining critical gaps in the quality of available data on financial markets and institutions despite a significant increase in the collection of data by regulators. (5/19/2015) FSOC press release.