Federal Reserve System Board Extends Comment Period for Proposal to Improve Resolvability and Resiliency of Large Banking Organizations (Fed. Reg.)

The Board of Governors of the Federal Reserve System extended the comment period for its proposed rule to "promote financial stability by improving the resolvability and resiliency of large, interconnected U.S. bank holding companies and the U.S. operations of large, interconnected foreign banking organizations."

Drafted pursuant to Section 165 of the Dodd-Frank Act, as well as related deduction requirements for all banking organizations subject to the Board of Governors of the Federal Reserve System's capital rules, the proposal would require:

• a U.S. top-tier bank holding company identified by the Board of Governors of the Federal Reserve System as a globally systemically important banking organization ("covered BHC") to maintain an outstanding minimum amount of loss-absorbing instruments, including a minimum amount of unsecured long-term debt and related buffer;

• the top-tier U.S. intermediate holding company of a global systemically important foreign banking organization with $50 billion or more in U.S. non-branch assets ("covered IHC") to maintain an outstanding minimum amount of intra-group loss-absorbing instruments, including a minimum amount of unsecured long-term debt and related buffer;

• restrictions on the other liabilities that a covered BHC or covered IHC may have outstanding; and

• state member banks, bank holding companies, and savings and loan holding companies that are subject to the Board of Governors of the Federal Reserve System's capital rules to apply a regulatory capital deduction treatment to their investments in unsecured debt issued by covered BHCs.

Due to the "range and complexity of the issues addressed," the comment deadline for the proposal has been extended from February 1, 2016 to February 19, 2016. The extension of the comment period was published in the Federal Register.