financial institutions

FFIEC Updates Interagency Guidance on Pandemic Planning

 

On March 6, the member agencies of the Federal Financial Institutions Examination Council (FFIEC) issued updated guidance specifying that financial institutions’ business continuity plans should address the threat of a pandemic outbreak and its potential impact on the delivery of critical financial services. The guidance identifies actions that banks should take to minimize the potential adverse effects of a pandemic. FFIEC Guidance.

 

 

EBA Publishes Discussion Paper on Use of Consumer Data by Financial Institutions

On May 4, 2016, the EBA published a discussion paper on innovative uses of consumer data by financial institutions, in line with its mandate to monitor financial innovation.  The EBA report notes that although general provisions apply to financial institutions regarding secrecy, conduct and data protection, which impose restrictions on the use of consumer data, EU legislation specific to the financial sector contains few requirements that address the use of consumer data by financial institutions.

In recent years, some financial institutions have started using consumer data in innovative ways across the EBA’s regulatory remit (that is, mortgages, personal loans, payment accounts, payment services, and electronic money). The paper identifies risks and benefits for consumers and financial institutions of such uses, as well as for financial integrity in general. Feedback received on this discussion paper will inform the EBA’s decision on which, if any, further actions may be required to mitigate the risks arising from this innovation, while also allowing market participants to harness its benefits.

OCC and FDIC Propose New Rule on Liquidity Risk Management

On October 30, the OCC and FDIC proposed substantively the same liquidity rule as the proposal approved by the Fed on October 24.  That proposal developed by the three agencies applies to: (i) banking organizations with $250 billion consolidated assets; (ii) banking organizations with $10 billion in on-balance sheet foreign exposure; (iii) systemically important, non-bank financial institutions that do not have substantial insurance subsidiaries or substantial insurance operations; and (iv) bank and savings association subsidiaries thereof that have total consolidated assets of $10 billion (covered institutions).  The proposed rule does not apply to community banks.

Covered institutions would be required to maintain a specified level of high-quality liquid assets such as central bank reserves, government and Government Sponsored Enterprise securities and corporate debt securities that can be converted easily into cash.  Under the proposal, a covered institution would be required to hold such high-quality liquid assets on each business day in an amount equal to or greater than its projected cash outflows less its projected cash inflows over a 30-day period.  The proposed rule is consistent with the Basel Committee’s LCR standard, but is more stringent in terms of the range of assets that will qualify and the assumed rate of outflows of certain types of funding.   Release.  Proposed Rule.

Rating Agency Developments

On December 13, Moody’s released its methodology for U.S. stand-alone housing bond programs secured by credit enhanced mortgages.  Moody’s Report.  

On December 13, S&P released its methodology for pre-insolvency structural protections in Europe.  S&P Report. 

On December 12, Fitch published criteria for rating financial institutions above the sovereign.  Fitch Report.  

On December 11, Fitch updated its criteria for analyzing financing and leasing companies.  Fitch Report.  

On December 11, Moody’s released its U.S. manufactured housing loan ABS surveillance methodology.  Moody’s Report.  

On December 11, Moody’s released its methodology for mortgage insurers.  Moody’s Report.  

On December 10, S&P released its methodology for Mexican trade receivables ABS transactions.  S&P Report.

Rating Agency Developments

On August 17, S&P updated its outlook assumptions for the U.K. residential mortgage market.  S&P Report. 

On August 15, Fitch updated its criteria for securities firms.  Fitch Report. 

On August 15, Fitch updated its financial institutions recovery ratings criteria. Fitch Report. 

On August 15, Fitch updated its criteria for market value structures.  Fitch Report. 

On August 15, Fitch updated its criteria for U.S. closed-end funds.  Fitch Report. 

On August 15, Fitch updated its global financial institutions master criteria.  Fitch Report. 

On August 14, Fitch updated its tax-supported rating criteria.  Fitch Report. 

On August 14, Fitch updated its non-financial corporate recovery ratings and notching criteria.  Fitch Report. 

On August 14, Fitch updated its global bond fund rating criteria.  Fitch Report.

On August 13, Moody’s updated its criteria for Mexican RMBS.  Moody’s Report.

On August 13, Fitch updated its sovereign rating criteria.  Fitch Report.

On August 13, Fitch updated is country ceilings criteria.  Fitch Report. 

On August 13, DBRS updated its stability ratings for Canadian structured income funds.  DBRS Report. 

On August 13, DBRS updated its criteria for Canadian split share companies and trusts.  DBRS Report. 

On August 10, Fitch updated is U.S. Re-REMIC criteria.  Fitch Report.

On August 10, Fitch updated is U.S. RMBS surveillance criteria.  Fitch Report.

On August 10, Fitch updated is U.S. RMBS loan loss model criteria.  Fitch Report.

On August 10, Fitch updated its structured finance servicing continuity risk criteria.  Fitch Report. 

On August 10, Fitch updated its criteria for analysis of CRE loans securing covered bonds.  Fitch Report. 

On August 10, Fitch updated its criteria for financial institution subsidiaries and holding companies.  Fitch Report.  

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FDIC Proposed Rule on Receivership Powers

On March 20, the FDIC proposed a rule, pursuant to section 210(c)(16) of the Dodd-Frank Act, that would permit the FDIC as receiver for a failed systemically important financial institution to enforce and prevent termination of the contracts of the institution’s subsidiaries or affiliates.  Comments must be submitted within 60 days of publication in the Federal Register.  FDIC Release. FDIC Rule on Receivership.

Rating Agency Developments

On August 16, S&P requested comment on project finance construction and operations counterparty methodology. S&P Release.

On August 16, S&P updated its defeasance criteria for U.S. CMBS transactions. S&P Release.

On August 15 and 16, Fitch released reports on: (i) recovery ratings for financial institutions; (ii) securities firms; (iii) bank holding companies; (iv) financial institutions; (v) market value structures; (vi) U.S. closed-end funds; (vii) infrastructure and project finance; (viii) bond funds; (ix) APAC CMBS; (x) prepaid energy transactions; (xi) U.S. residential mortgage Re-REMICs; (xii) U.S. RMBS; (xiii) Prime RMBS loan loss models; (xiv) state housing finance agencies – single family mortgage program; (xv) state revolving fund and municipal loan pools; and (xvi) Japan CMBS surveillance.

On August 12, DBRS published a guide regarding its legal criteria for European structured finance transactions. DBRS Release.