Fed Proposes New SIFI Risk Rating System

The Federal Reserve today proposed a new supervisory rating scale for large bank holding companies with more than $50 billion in assets. The Fed is seeking to better harmonize the ratings system with its existing supervisory program, while providing clarity and consistency around its supervisory expectations and the consequences of supervisory ratings.

The new scale would assign ratings for capital planning, liquidity risk management and governance and controls. Banks would be assigned ratings in each category, rather than receiving a standalone composite rating. Each category must be highly rated for the bank holding company to be considered “well-managed.”

The American Bankers Association is reviewing the proposal to determine the extent to which it provides a more tailored and sensitive rating system. Bankers are invited to provide feedback on the proposal and whether further adjustments are needed. For more information, contact ABA’s Hu Benton.

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About Author

Monica C. Meinert

Monica C. Meinert is deputy editor of the ABA Banking Journal and a senior editor at the American Bankers Association, where she oversees ABA Daily Newsbytes.