In concert with an inter-agency proposal redesigning U.S. prudential regulation for foreign banking organizations (FBOs), the Federal Reserve has proposed specific changes for intermediate holding companies (IHCs) and other operations under its sole authority.  Viewing an FBO as a whole rather than focusing prudential authority solely on the IHC will, the Fed believes, reduce incentives to transfer exposures out of an IHC into branches or agencies or simply to defer IHC formation.  The FRB has not even solicited comment on raising the IHC-formation threshold from the current $50 billion level, but it has joined the other regulators in crafting a framework that otherwise applies to FBOs with over $100 billion in assets in the U.S. and in increasing the severity of these requirements based on additional risk factors.  The FRB is considering different definitions for cross-jurisdictional risk – perhaps the most important of these additional factors. 

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