Global

Details

  • Industry: Financial Services
  • Type: White paper
  • Date: 4/1/2011

Pressure to act now - New US rules for Resolution Plans 

29 March 2011: The US Fed and FDIC have announced their proposals for resolution planning and anticipate a compliance deadline of 31 December 2011. Of the estimated 124 ‘Covered Companies’, a number will be non-bank companies and foreign banks treated as Bank Holding Companies under the International Banking Act. A failure to comply with the new proposals could lead to more stringent capital, leverage or liquidity requirements or an order to change to the operating structure to facilitate an orderly resolution under the US Bankruptcy Code.
This proposal to include foreign banks with worldwide assets >US$50bn is a recognition of the challenges associated with cross-border crisis management and the growing trend toward reduced reliance on home supervision. The comparison of the detailed requirements against recent European proposals and the UK pilot scheme highlight potential for divergence across jurisdictions. It is essential for ‘Covered Companies’ to act now, to be in a position to comply by the end of this year.