The Federal Reserve’s creation of a Primary Dealer Credit Facility (PDCF) follows the announcement of a Commercial Paper Funding Facility, which we discussed earlier this week, and represents a continuation of the Federal Reserve’s use of its “unusual and exigent” powers to help during the current crisis. For
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John Banes
Mr. Banes is a partner in Davis Polk's Financial Institutions Group. [Full Bio]
Federal Banking Agencies Recognize the Rise of Index Funds and Passive Investing
In a welcome move, two recent actions by the Federal Reserve, OCC and FDIC (the Banking Agencies) recognize the increasing role of fund complexes and passive investing. The Banking Agencies have released a statement under the Federal Reserve’s Regulation O which acknowledges the reality that equity mutual funds may sometimes…
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Encouraging Innovation: Brokered Deposits—What Fintechs Need to Know to Partner with Banks under the FDIC’s Proposed Regulations
In a step forward for the digital transformation of banking and partnerships between banks and FinTechs, the FDIC released proposed changes to its brokered deposit regulations in late December 2019. The proposed changes are designed to update the regulatory framework as much as possible within the constraints of the existing…
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Client Memorandum: FSOC Shift to an Activities-Based Approach Signals an Emphasis on the Risks to Financial Stability from Digital Transformation
The Financial Stability Oversight Council’s (FSOC) recently revised guidelines (the 2019 Guidelines) on how it will identify and address financial stability risks are a major shift from the guidelines it issued in the immediate aftermath of the Financial Crisis. The 2019 Guidelines draw upon lessons learned from…
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Visual Memorandum: Final Tailoring Rules for U.S. Banking Organizations
The U.S. banking agencies have completed one of the most important steps towards rebalancing the U.S. bank regulatory framework since the Dodd-Frank Act was passed in the wake of the 2007 – 2008 financial crisis. The agencies have adopted final rules to tailor enhanced prudential standards and U.S. Basel III…
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“Off the Rack”: Federal Reserve Finalizes Tailoring Rules with Few Changes
By John Banes, Luigi L. De Ghenghi, Randall D. Guynn, Jai R. Massari, Margaret E. Tahyar, Daniel E. Newman, Christopher M. Paridon, Karen Pelzer, Ryan Johansen & Greg Swanson on
Posted in Federal Reserve, U.S. Basel III
The Federal Reserve has finalized its rules to further tailor the regulatory framework for enhanced prudential standards and the U.S. Basel III capital and liquidity requirements applicable to domestic banking organizations and foreign banking organizations (Final Tailoring Rules). Compared to the proposed rules that the U.S. banking agencies…
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Better Late Than Never: SEC Proposes Guide 3 Update
By John Banes, Luigi L. De Ghenghi, Randall D. Guynn, Nicholas A. Kronfeld, John B. Meade, Margaret E. Tahyar, Shane Tintle, Daniel E. Newman, Tyler X. Senackerib & Elizabeth S. Weinstein on
Posted in Proposed Rule, SEC
In a long-awaited milestone, the SEC has proposed an update of Guide 3, the industry guide for banking organizations. The proposal eliminates a number of the current requirements under Guide 3 and streamlines many of those that remain. The three “new” credit quality ratios in the proposal are, in practice,…
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CECL Delayed for Small and Private Companies, But 2020 Implementation is Likely Here to Stay
Posted in Proposed Rule, SEC
The Financial Standards Accounting Board (FASB) voted on Wednesday to propose delaying the implementation date of the Current Expected Credit Losses accounting standard (CECL) until 2023, for all companies other than larger SEC filers. The proposal would reduce the number of implementation dates from three to…
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U.S. Regulators Announce BSA/AML Enforcement Actions Against U.S. Broker-Dealers
As 2018 came to a close, U.S. financial regulators continued to pursue anti-money laundering (“AML”) enforcement actions against financial institutions, announcing monetary penalties against and resolutions with three U.S. broker-dealers. The Financial Crimes Enforcement Network (“FinCEN”), the Securities and Exchange Commission (“SEC”) and the…
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EU No-Deal Contingency Planning
By John Banes, Michael Sholem & Jennifer Duffy on
On December 19, 2018 the European Commission published the legislative proposals and delegated acts (the “Package”) which it had previously outlined in its Contingency Action Plan of November 13, 2018 to prepare for a “no-deal” scenario whereby the UK exits the EU on March 29, 2019 without a…
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