The Federal Reserve has finalized its supervisory guidance on board of directors’ effectiveness (Board Effectiveness Guidance) more than three years after it was proposed.  The final Board Effectiveness Guidance is a key milestone in the Federal Reserve’s multi-year review of the practices of boards of directors, particularly at
Continue Reading Federal Reserve Finalizes Board Effectiveness Guidance

We have published a memorandum on what companies and lenders need to know about oversight under the CARES Act and related enforcement risks. By reference to the global financial crisis, the memorandum provides a roadmap for companies and lenders thinking about and seeking to minimize the risks of participating in
Continue Reading Memorandum on CARES Act Oversight and Enforcement Risks for Companies and Lenders

The UK’s main financial regulators announced a series of measures last week intended to alleviate some of the regulatory burdens facing firms and financial market infrastructures in the wake of the coronavirus (COVID-19) outbreak. These are in addition to initiatives announced by the Bank of England (BoE) and HM Treasury
Continue Reading UK Regulatory Supervision During the Coronavirus (COVID-19) Crisis

Tom Baxter of Sullivan & Cromwell LLP, and formerly the General Counsel of the Federal Reserve Bank of New York, has written an important article titled “The Rise of Risk Management in Financial Institutions and a Potential Unintended Consequence – The Diminution of the Legal Function,” recently published by the
Continue Reading Recommended Read: The Rise of Risk Management in Financial Institutions and a Potential Unintended Consequence – The Diminution of the Legal Function and the Role of Legal Departments

The Federal Reserve has finalized a new supervisory ratings system for large financial institutions (LFIs), discussed in our visual memorandum here.  The new LFI rating system, which reflects the three core areas of focus in the Federal Reserve’s current LFI supervisory framework—capital, liquidity and governance and controls—is
Continue Reading Visual Memorandum: The Federal Reserve’s Large Financial Institution Rating System — Final Rule

On June 19, 2018, Margaret E. Tahyar will moderate the “Supervisory and Examination Issues and Updates” panel at the 2018 Prudential Regulation Conference hosted by SIFMA and The Clearing House in Washington, D.C.  In connection with Ms. Tahyar’s participation in this event, we are today releasing two interrelated visual memoranda
Continue Reading Visual Memoranda: The Federal Reserve’s Proposed Governance Guidance for Boards and Management and Proposed Large Financial Institution Rating System

Davis Polk has submitted a comment letter on the Federal Reserve’s proposed supervisory guidance on board governance (which we summarized in a previous blog post).  Consistent with our previous blog posts on the proposed board guidance and separate management guidance  issued by the Federal Reserve for large financial institutions,
Continue Reading Davis Polk Comments on Federal Reserve’s Proposed Guidance on Board Governance

The Federal Reserve’s proposed core principles on management of large financial institutions are another welcome addition to its efforts to clarify and better distinguish between the roles of boards of directors and the management of large financial institutions. The new guidance (Management Guidance) describes core principles of effective senior management,

Continue Reading Federal Reserve Proposes New Guidance on Management of Large Financial Institutions

On Halloween, the New York and Vermont attorneys general obtained a $700,000 settlement from Hilton for, among other violations, late breach notification.  Davis Polk has published a blog post on this increase in cyber regulation enforcement and the effect on breach notification deadlines.  The full blog post is available at
Continue Reading Cybersecurity Blog Post: More Tough Penalties for Late Breach Notification

The Federal Reserve’s proposed supervisory guidance on corporate governance is a breath of fresh air that should encourage banking boards to focus on their core responsibilities and avoid blurring the distinctions between executive and non-executive duties.  It is also a signal that supervisors intend to move away from the blunt
Continue Reading The Federal Reserve Breathes Fresh Air into Its Corporate Governance Guidance