Recovery planning guidelines will be rescinded for some large banks under a final rule issued Wednesday by the national bank regulator.
The rule takes effect 30 days after its publication in the Federal Register, the Office of the Comptroller of the Currency (OCC) said.
The guidelines were issued in 2016, the agency said, which required large banks to have a three-part recovery program. That included: quantitative or qualitative indicators of severe stress risk reflecting vulnerabilities; a “wide range” of credible options for the bank in response to stress to restore its financial strength and viability, and; an assessment and description of how these options would affect the bank.
According to the agency, the recission “achieves the OCC’s goal of identifying and eliminating unnecessary regulatory burden without compromising the safety and soundness of the covered banks or the banking system.”
The agency said covered banks will not be required to develop and maintain formal recovery planning documentation. The agency, for its part, will no longer examine for recovery planning documentation.
“Recission of the Guidelines does not restrict banks from continuing to engage in recovery planning activities but rather provides bank management with increased freedom to allocate resources more efficiently and pursue those risk management activities best suited to a bank’s business model, management structure, complexities, and risks,” the OCC said. “While the Guidelines may no longer impose unnecessary regulatory burden on the covered banks, these institutions remain responsible for managing the risks to their business models.”
The OCC proposed the recission in November. It said then the proposal was part of the agency’s “ongoing assessment of its supervisory framework to identify and eliminate unnecessary regulatory burden.”
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