The Federal Reserve has proposed a series of additional prudential requirements governing large bank holding companies and nonbank financial institutions designated systemic. The NPR includes an array of new standards, with this report assessing the additional capital requirements, liquidity rules and related board requirements, and new credit-exposure constraints. A forthcoming client report will analyze the remaining requirements in the NPR: new stress tests, risk-management governance standards, a debt-to-equity limit and early-remediation requirements designed to ensure prompt corrective action at the parent-company level. Although the overall new systemic framework would cover all large bank holding companies (BHCs), affected foreign banking organizations (FBOs), savings-and-loan holding companies (SLHCs) and designated nonbanks, the thrust of the NPR in fact affects only large U.S. BHCs, with few clear distinctions based on size as a BHC grows over the initial $50 billion threshold.

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