Fed Board acts June 14 on single-counterparty credit limits rule

A final rule to establish single-counterparty credit limits for large U.S. bank holding companies and foreign banking organizations, along with a related regulatory reporting proposal, is scheduled for Federal Reserve Board action during a June 14 open board meeting.

The rule was proposed in 2016 to implement section 165(e) of the Dodd-Frank Act Wall Street Reform and Consumer Protection Act (Dodd-Frank) and was written to apply to banking organizations with $50 billion or more in total consolidated assets. The proposal sets three increasingly stringent credit exposure limits based on banking firms’ systemic importance. The aim is to limit the firms’ exposure to an unaffiliated company and, in turn, reduce risk arising from the company’s failure.

The Fed’s June 14 open meeting is scheduled for 2:30 p.m. ET and will be webcast live.

2016 Proposed Rule

Federal Reserve Board Open Meeting Agenda