Federal Legislative & Regulatory Updates
Fed Revisions to Rating System for Large Banks
The Federal Reserve has finalized revisions to its supervisory rating framework for large banks. The current rating system includes three components: capital, liquidity, and governance and controls. Each component has four potential ratings: broadly meets expectations, conditionally meets expectations, deficient-1, or deficient-2.
The Fed is amending the system to consider a bank with no more than one deficient-1 rating to be “well managed.” Firms that do not meet this standard will be deemed not well-managed and face limitations on certain activities. A bank with a deficient-2 rating for any component will continue to be considered not well managed.
Author: sdbrownlow
Student of Design