As promised when the agencies proposed “tailoring” standards for large U.S. banks, the FRB, OCC, and FDIC have now proposed a revised set of capital and liquidity rules for foreign banking organizations (FBOs) operating in the United States. These standards go farther than the framework previously established for intermediate holding companies (IHCs), leaving it unchanged but expanding aspects of the IHC framework into a broader one that, in conjunction with a parallel FRB-only NPR, is based on the overall “footprint” an FBO has in the U.S. The proposal for the first time applies the U.S. liquidity coverage ratio (LCR) and, when finalized, the net stable funding ratio (NSFR) to IHCs based on the combined FBO’s U.S. footprint.
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