The Federal Reserve Proposes TLAC and Related Requirements for U.S. G-SIBs and U.S. IHCs of Foreign G-SIBs

On Friday, the Federal Reserve issued its latest proposal to impose heightened regulatory capital and related requirements on the largest, most systemically important U.S. bank holding companies (“Covered BHCs”) and on U.S. intermediate holding companies owned by comparable FBOs (“Covered IHCs”).

The Federal Reserve’s proposal includes:

• Minimum external total loss-absorbing capacity (“TLAC”) requirements for Covered BHCs, which include a minimum level of long-term debt (“LTD”) and related TLAC buffers;
• Minimum internal TLAC and LTD requirements for Covered IHCs
• “Clean holding company” requirements
• A new regulatory capital deduction