Enhanced Prudential Standards for Foreign Banking Organizations: The US Approach to Ring-Fencing | White & Case LLP International Law Firm, Global Law Practice
Enhanced Prudential Standards for Foreign Banking Organizations: The US Approach to Ring-Fencing

Enhanced Prudential Standards for Foreign Banking Organizations: The US Approach to Ring-Fencing

The Board of Governors of the Federal Reserve System ("Board") on February 18, 2014 adopted a final rule ("Final Rule") to implement enhanced capital, liquidity and other prudential standards for foreign banks with US branches, agencies or US bank subsidiaries ("foreign banking organizations").Though not expressly dictated by the Dodd-Frank Act, the Final Rule requires unprecedented ring-fencing of capital and liquidity in the United States, including through the required formation of an intermediate holding company.

This Alert discusses the four distinct categories of foreign banking organizations created by the Final Rule and the enhanced standards that apply to each. The charts included as appendices to this Alert offer useful reference tools to assist a foreign banking organization in determining the category into which it falls and the particular enhanced standards that apply to that category.

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