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Cadwalader Attorneys Analyze Proposed Framework for Applying Prudential Standards to Large Banks

Cadwalader attorneys provided an overview of a proposed regulatory framework for applying prudential standards (including capital and liquidity requirements) to large U.S. banking organizations.

Federal banking agencies issued two notices of proposed rulemaking designed to lessen regulatory requirements on small and regional banking organizations. As described more fully in a Cadwalader memorandum, these two proposals would establish a revised framework for applying prudential, capital and liquidity standards to large U.S. banking organizations based on risk, consistent with the mandate imposed by Congress in the Economic Growth, Regulatory Relief and Consumer Protection Act enacted earlier this year.

One proposal issued by the Federal Reserve Board ("FRB") would tailor the application of prudential standards to U.S. bank holding companies and apply enhanced standards to certain large savings and loan holding companies. Another proposal, jointly issued by the FRB, the Office of the Comptroller of the Currency and the FDIC would similarly tailor the application of the agencies' existing capital regulations and liquidity coverage ratio requirements, as well as the proposed net stable funding ratio regulation.

This memorandum was authored by Scott Cammarn and Mark Chorazak.

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