Regulatory Alerts2022-10-24 | 2022-23003Resolution-Related Resource Requirements for Large Banking Organizations
The Board of Governors of the Federal Reserve System and the FDIC have issued an advance notice of proposed rulemaking to evaluate whether mandating an additional layer of loss-absorbing capacity at the insured depository institution level would enhance resolution flexibility for large banking organizations. This proposed requirement targets Category II and III firms, aiming to reduce contagion risk by protecting uninsured depositors and preserving the FDIC’s ability to utilize diverse resolution strategies, such as bridge banks or bail-ins, without resorting to costly sales. The agencies are soliciting public comments on the potential costs, benefits, and structural design of this extra capacity to ensure it supports orderly resolution while maintaining credit availability.