Regulating Systemically Important Financial Companies
The Federal Reserve has released a much-awaited proposed rule on the enhanced prudential standards and early remediation framework that will apply to large bank holding companies and to those nonbank financial companies designated by the new Financial Stability Oversight Council as “systemically important.” The proposed rule would implement Sections 165 and 166 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) and, together with other rulemakings, form the heart of systemic risk regulation under Dodd-Frank. Comments on the proposed rule, which was published last week in the Federal Register, are due by March 31, 2012.