A recently proposed rule by the Federal Reserve Board and the Federal Deposit Insurance Corporation would systemically impose significant bank holding companies and nonbank financial companies to submit annual resolution plans and quarterly credit exposure reports.
The agencies are requesting comments on the proposal, which would implement requirements of Dodd-Frank by June 10, 2011. The requirements apply to bank holding companies with total consolidated assets of $50 billion or more and nonbank financial companies designated by the Financial Stability Oversight Council for supervision by the Board. The annual resolution plan would be required to describe the company’s strategy for rapid and orderly resolution in bankruptcy during times of financial distress and include a detailed listing and description of all significant interconnections and interdependencies among major business lines and operations of the company that, if disrupted, would materially affect the funding or operations of the company or its major operations. The quarterly credit exposure report would be required to describe the nature and extent of the company’s credit exposure to other large financial companies, as well as the nature and extent of credit exposure by other large financial companies to the company. The credit exposure report would be required to include information related to the aggregate credit exposure associated with a range of transactions.