By: Alex Radetsky
On October 3, 2011, the Financial Stability Board (“FSB”) , an organization comprised of governmental and other financial authorities from around the world, including the SEC, Federal Reserve and Deptartment of Treasury for the U.S., approved a package of policy proposals meant to address systemic risk and “too big to fail” issues which will be submitted to the G20 Summit in November. The policy proposals include:
- Standards for effective resolution regimes for financial institutions
- Requirements that globally important systemically important financial institutions (“G-SIFIs”) develop and submit recovery and resolution plans
- The development of cooperation agreements and cross-border crisis management groups by home and host regulators of G-SIFIs
- Additional loss absorbency requirements for G-SIFIs
- Improved data systems for risk management and assessments of the adequacy of supervisory resources, among other measures to enhance the intensity and effectiveness of the supervision of financial institutions
- Enhanced international standards for the robustness of core financial market infrastructures
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The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank or the Act) was enacted one year ago. At that time, it was heralded as perhaps the most dramatic set of regulatory reforms since the 1930s. The Act was expected to have significant effects in both the short and long term. Dodd-Frank’s provisions, however, are not confined to the US market. The Act is intended to have significant implications for non-US companies doing business in the United States or whose securities are listed on a US stock exchange. What is more, the Act purports to regulate certain transactions and entities with little direct connection to the United States.
by Robert J. Lemons and Heath P. Tarbert
On July 6, 2011, the FDIC’s Board of Directors met to discuss, among other things, a proposed rule that would require certain systemically important financial institutions to prepare and periodically update so-called “living wills” to resolve their affairs if the institution faced material distress or failure. Also addressed were required reports identifying the institutions’ credit exposures to other systemically important firms. The proposed rule is part of a joint rulemaking effort between the FDIC and the Federal Reserve in their efforts to implement section 165(d) of the Dodd-Frank Act. In April, the FDIC and the Federal Reserve published proposed rules on living wills and credit exposure reports for comment by June 10th.
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Lessons Learned: Why Some Banks Are Better Acquirers Than Others
American Banker M&A Symposium
June 16, 2011, The Harvard Club, New York, NY | Register Now
Weil’s Derrick Cephas, head of the firm’s Financial Institutions Regulatory practice, will participate in a panel titled “Lessons Learned: Why Some Banks Are Better Acquirers Than Others.” The panel will discuss best practices on how banks can achieve success via acquisitions. The session will run from 1:15 pm to 2:15 pm.
Weil’s Peter King and Heath Tarbert have written an overview of Basel III in Aspen Publishers’ May 2011 Banking and Financial Services Policy Report: A Journal on Trends in Regulation and Supervision.
The article highlights the major aspects of Basel III and outlines how these regulatory changes will likely impact financial institutions around the world. In so doing, the article focuses on the following goal-driven features of Basel III:
- Acknowledging the Shortcomings of Basel I & Basel II
- Increasing the Quality and Quantity of Capital
- Establishing Additional Buffers
- Introducing a Leverage Ratio
- Managing Counterparty Risks
- Improving Liquidity
- Dealing with SIFIs
- Implementing Basel III
Click here for the full-text PDF of the article..