Agencies Extend Comment Period on Proposed Rules to Strengthen Large Bank Capital Requirements

In view of their joint ongoing consultation on a new rule to modify the capital requirements of large financial institutions in the U.S. (please see EventID 22526 and EventID 23018 in this context for more information), the key U.S. banking regulators – the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Board of Governors of the Federal Reserve System (FED) – have now announced an extension of the comment period. Specifically, in an effort to provide more time to review the consultation and enclosed issues and submit comments to the regulators, the government agencies plan to extend the comment period of this consultation up to January 16, 2024
To recall, the proposed new rule would entirely overhaul the prudential requirements of in-scope, large U.S. financial institutions with the aim of enhancing capital requirements and resilience, for example, by moving towards standardized approaches to assess risks and thus capital requirements of institutions, away from internal models which permitted institutions to apply their „own standards“ or by adopting the standards of the fundamental review of the trading book (FRTB). The move to make large scale changes to the capital requirements of large banks followed the turmoil in the U.S. banking sector earlier this year.
To avoid duplication of information, we refrain from summarizing the consultation again. Please refer to the above noted Event IDs for detailed, comprehensive information on the intended regulatory changes.
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In an accompanying press statement, the OCC also announced that the FED will also extend the comment period of its consultation on proposed modifications to the capital surcharge of the largest and most complex banks. As this consultation was launched by the FED only, there is another event pertaining to this issue only. Please refer to EventID 23444 in this context for more information.