banking organizations

Joint Proposal on Leverage Ratio Standards

On July 9, the Fed, the FDIC and the OCC issued a joint proposed rule to strengthen the leverage ratio standards for large, systemically significant U.S. banking organizations.  Under the proposed rule, bank holding companies with more than $700 billion in consolidated total assets or $10 trillion in assets under custody (covered BHCs) would be required to maintain a tier 1 capital leverage buffer of at least 2 percent above the minimum supplementary leverage ratio requirement of 3 percent, for a total of 5 percent.  The proposed rule would be effective on January 1, 2018.  Comments must be submitted within 60 days of publication in the Federal Register.  Joint ReleaseProposed Rule.

Rating Agency Developments

On June 29, Moody’s released it consolidated global bank rating methodology. Moody’s Report.

On June 29, DBRS released its global methodology for banks and banking organizations. DBRS Report.

On June 29, Kroll Bond Ratings released its equipment lease and ABS rating methodology. Kroll Report.

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Large Bank Stress Testing Guidance Finalized

On May 14, the Fed, FDIC, and OCC issued final supervisory guidance for stress testing practices at banking organizations with total consolidated assets of more than $10 billion. The guidance outlines general principles for a satisfactory stress testing framework and describes various stress testing approaches. Supervisory Guidance.