SIFMA, ABA and FSR Submit Comments to U.S. Federal Regulators on Proposed Leverage Ratio Rule

SIFMA, the American Bankers Association (“ABA”) and the Financial Services Roundtable (“FSR”) submitted comments to the Board of Governors of the Federal Reserve (“FRB”), the Office of the Comptroller of the Currency (“OCC”) and the Federal Deposit Insurance Corporation (“FDIC”) on their proposal regarding enhanced supplementary leverage ratio standards (“SLR”) for certain bank holding companies and their subsidiary insured depository institutions.  The proposal would require an SLR surcharge of Tier 1 capital on eight U.S. bank holding companies identified as global systemically important banks and their insured depository institutions.  The proposal would also require these banks to maintain a Basel III SLR of at least 6% to be considered well capitalized under the prompt corrective action framework. 

According to the comment letter, SIFMA, the ABA and the FSR (the “Associations”) agree that “adequate levels of quality capital are an important safeguard that “helps institutions and the financial system as a whole withstand periods of stress.”  However, the Associations share serious concerns about the timing and substance of the proposal, and the consequences that will arise if the proposal is finalized in its current form.  The Associations state that the FRB, OCC and FDIC should only consider the proposal after the Basel Committee has finalized its recommended exposure measure, as well as make recommendations to modify the definition of “total leverage exposure.”

See: SIFMA, ABA, FSR Comment Letter to FRB, OCC, and FDIC.