Summary Of Final Rule Imposing Enhanced Prudential Standards On FBOs

Last week, the Federal Reserve Board (the "Board") issued its long-awaited final enhanced prudential rule (Regulation YY) under Section 165 of the Dodd-Frank Act (the "Final Rule") for bank holding companies and foreign banking organizations ("FBOs") with global consolidated assets of $50 billion or more ("covered FBOs").¹ This brief overview focuses on the applicability of the Final Rule on FBOs. The Board expects that approximately 100 FBOs will be subject to enhanced prudential standards under the Final Rule. In addition, the Final Rule imposes stress testing on FBOs with total consolidated assets of $10 billion or more, and requires U.S. risk committees for FBOs with total consolidated assets of $10 billion that are publicly traded.