Client Alert
| January 4, 2012
Federal Reserve Board Defines Enhanced Prudential Standards
On December 20, 2011 the Board of Governors of the Federal Reserve System (the “Board”) issued a release entitled “Enhanced Prudential Standards and Early Remediation Requirements for Covered Companies” (the “Release”) that proposes the adoption of Regulation YY, itself entitled “Enhanced Prudential Standards” (“Regulation YY”). The proposed regulation would implement the enhanced prudential standards required by Section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). Regulation YY would define the companies it would cover and would impose (i) risk-based capital requirements, (ii) leverage limits, (iii) liquidity requirements, (iv) single counterparty exposure limits, (v) governance requirements for risk management, (vii) stress test requirements and (viii) special debt-to-equity limits for certain companies, and would establish a procedure for early remediation based on the failure to comply with these new requirements.
This memorandum is intended only as a general discussion of these issues. It is not considered to be legal advice. We would be pleased to provide additional details or advice about specific situations. For additional information on this important topic, please feel free to call upon your Dewey & LeBoeuf relationship partner. No part of this publication may be reproduced, in whole or in part, in any form, without our prior written consent.
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