FRB Requests Comments On Proposed Single-Counterparty Credit Limits

Introduction

The Board of Governors of the Federal Reserve System ("FRB") has requested comments on reissued proposed rules that would establish a single-counterparty credit limits ("SCCL") for domestic and foreign bank holding companies with $50 billion or more in total consolidated assets. The proposed rules are intended to implement Section 165(e) of the Dodd-Frank Act, which requires the FRB to impose limits on the amount of credit exposure that such domestic or foreign bank holding companies can have to unaffiliated companies in order to reduce the number of risks that might arise from the companies' failure. The proposed rules, which build on earlier rule proposals by the FRB to establish SCCLs for large domestic and foreign banking organizations, would impose a stringency that increased according to the corresponding levels of systemic importance of the firms to which the rules applied.