Federal bank regulatory agencies announced the comment
period for their proposed rule on long-term debt has been extended until
Jan. 16, 2024. The proposal is intended to improve the resolvability of large
banks and enhance financial stability and was created with input from the
Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the
Comptroller of the Currency.
Numerous financial trade associations submitted a comment
letter “requesting a 60-day extension of the comment period” in October via the
Federal Register. The letter was signed by representatives of the
American Bankers Association, the Bank Policy Institute, the Financial Services
Forum, the Institute of International Bankers and the Securities Industry and
Financial Markets Association.
The trades asserted additional time is necessary to review
four resolution-related proposals:
·
“Long-term debt requirements for large bank
holding companies, certain intermediate holding companies of foreign banking
organizations, and large insured depository institutions (long-term debt
proposal);
·
“Resolution plans required for insured
depository institutions (IDI) with $100 billion or more in total assets;
informational filings required for insured depository institutions with at
least $50 billion but less than $100 billion in total assets (IDI rule proposal);
·
“Guidance for resolution plan submissions of
domestic triennial full filers (domestic filer proposed guidance); and
·
“Guidance for resolution plan submissions of
foreign triennial full filers (foreign filer proposed guidance and, together
with the domestic filer guidance, 165(d) proposed guidance).”
In the letter, the trades further assert the extension is
necessary given the close relationship between the four proposals, as well as
the open Basel III Endgame proposal and, for several large banks, the global systemically
important bank (GSIB) surcharge proposal.
Specifically, the trades argued an extension is appropriate
because:
·
“the number, length, and complexity of the
proposals require detailed attention from affected banking organizations;
·
“understanding certain of the effects of the
proposals requires analysis and understanding of the potential effects of other
proposals;
·
“comments on one proposal may relate to or
affect comments on another proposal; and
·
“the same personnel from affected banking
organizations are, in many cases, responsible for analyzing the proposals.”
The agencies extended the comment period beyond the original
Nov. 30 deadline to allow interested parties additional time to analyze the
issues and prepare their comments.