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ICBA applauded the Financial Stability Oversight Council’s unanimous votes to propose new interpretive guidance on nonbank financial company designations and an analytic framework for identifying potential risks to financial stability from certain activities.
Details: “Large nonbank financial institutions that pose outsized risks to the financial system similar to those posed by large banks should be required to meet similar capital and liquidity standards,” ICBA President and CEO Rebeca Romero Rainey said. “We support the publication of new guidance that will level the playing field, address risks to financial stability, and provide transparency to the public.”
Background: FSOC advanced:
Proposed interpretative guidance on its procedures for designating nonbank financial companies for Federal Reserve supervision and enhanced prudential standards.
A proposed analytic framework for how the council identifies, assesses, and addresses potential risks to financial stability from activities or firms.
More: Romero Rainey noted that ICBA has consistently supported enhanced capital, leverage, and liquidity standards for the largest financial institutions. For instance, she cited a January letter from ICBA urging federal regulators to apply stricter regulatory standards on large regional banks to avoid government bailouts in the event of financial instability.