FedFin Assesses the Big Disconnect in Reform Legislation
In this report, FedFin looks at Title VI of H.R. 4173, the reform bill as passed by
the Senate. This title includes some of the most significant strategic drivers in the
measure, including new inter-affiliate transaction and credit-risk limits. These
provisions are similar to those in the House bill and could, as noted in prior FedFin
reports, lead to dramatic break-ups and reduced counterparty exposures for large,
complex banking organizations. A little-noticed provision in all of the bills requires
BHCs and S&LHCs to be “well-capitalized on enactment,” heightening the current
“adequate” standard.