In a comment letter to the Federal Reserve and the FDIC yesterday, ABA urged the agencies to reconsider proposed guidance for the resolutions plans submitted by certain foreign banking organizations. The proposed guidance would apply to FBOs required to file so-called “living wills” on a triennial basis and whose U.S. intermediate holding companies have a method 2 G-SIB score of 250 or more. At present, three FBOs would be subject to the guidance.
In its comments, ABA noted that the proposed changes—which would align the requirements for FBOs more closely with those that apply to U.S. G-SIBs— “seemingly ignore that the FBOs have global resolution plans which are required by home country regulators.” The association urged the agencies to instead focus on targeting their guidance to focus on the current risk posed to the U.S. operations of covered FBOs.
ABA echoed these comments in another joint letter submitted with the Bank Policy Institute and the Securities Industry and Financial Markets Association earlier this week. Read ABA’s letter.