Financial Regulatory Developments Focus - Apr 19, 2018 Issue 15/2018

Bank Prudential Regulation & Regulatory Capital

Two US Banking Regulators Propose Amendments to Supplementary Leverage Ratio Calculations for GSIBs and Their Insured Depository Institution Subsidiaries

On April 11, 2018, the U.S. Board of Governors of the Federal Reserve System and U.S. Office of the Comptroller of the Currency published a joint notice of proposed rulemaking and request for comment that would modify the calculation of the enhanced supplementary leverage ratio for U.S. global systemically important bank holding companies and certain of their insured depository institutions subsidiaries regulated by the Federal Reserve and OCC. The proposal would also make certain conforming changes to the Federal Reserve Board's total loss-absorbing capacity (TLAC) requirements. Under the current framework, in order to avoid constraints on distributions and certain discretionary bonus payments, covered institutions are required to maintain a supplementary leverage