Do All US Banks have to Comply with New Fed Reserve Early Remediation Rules?

• By: Staff Editor
• Date: December 29, 2011

No – the proposed Federal Reserve rules issued in December 2011 would only apply to US bank holding companies with consolidated assets of $50 billion.

The new rules would also apply to any nonbank financial firms that may be designated by the Financial Stability Oversight Council as systemically important companies.

The early remediation requirements included in the proposed rules would be triggered by specific issues such as capital levels, stress test results and risk management weaknesses. These would be calibrated to forward-looking in some cases.

If triggered, early remediation actions would include:

• Restrictions on growth
• Capital distributions
• Executive compensation
• Capital raising
• Asset sales

Read a full summary of the requirements of the new proposed Federal Reserve Prudential Standards and Early Remediation for Covered Companies.