Details

  • Service: Advisory, Risk Consulting, Financial Risk Management
  • Industry: Banking & Capital Markets
  • Date: 1/9/2014

Regulatory Practice Letter #13-03 

On December 17, 2012 the Federal Reserve Board (“Fed”) released Supervision and Regulation Letter 12-17 to provide guidance to institutions under its supervisory authority regarding a new framework for the consolidated supervision of large financial institutions, including bank and savings and loan holding companies with $50 billion or more in consolidated assets and foreign banking organizations with combined US operations assets of $50 billion or more.
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Purpose

 

The consolidated supervision framework has two primary objectives:

 

  • Enhancing resiliency of a firm to lower the probability of its failure or inability to serve as a financial intermediary.
    • Each firm is expected to ensure that the consolidated organization (or the combined U.S. operations in the case of FBOs) and its core business lines can survive under a broad range of internal or external stresses.
  • Reducing the impact on the financial system and the broader economy in the event of a firm’s failure or material weakness.
    • Each firm is expected to ensure the sustainability of its critical operations and banking offices under a broad range of internal or external stresses.