Shortly before a group of moderate Democrats petitioned Senate Banking Chairman Crapo (R-ID) to advanced legislation to revise the Dodd-Frank threshold for systemic BHC regulation, a bipartisan pair of senators introduced legislation to revise the $50 billion threshold to designate systemic BHCs based on the way U.S. GSIBs are selected. This would eliminate the simple $50 billion threshold to rely instead not only on more general size thresholds, but also on the often-qualitative FRB and global systemic criteria. The new approach would almost surely relieve larger BHCs that are not now designated as GSIBs from all of the additional prudential and resolution requirements of the Dodd-Frank Act. Because this approach could leave BHCs of considerable size – e.g., above $250 billion – out of the Dodd-Frank standards, some have countered with relief only for BHCs above $50 billion but below a size threshold such as the $225 billion standard recently suggested as a compromise by NEC Director Cohn.
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