How The Fed's Stress Test Rules Mitigate Systemic Risk

Law360, New York (May 14, 2013, 2:14 PM EDT) -- On Oct. 12, 2012, the Board of Governors of the Federal Reserve System published in the Federal Register two final rules implementing the stress testing requirements of Section 165(i) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The first (the “SIFI Final Rule”) requires systemically important nonbank financial companies designated by the Financial Stability Oversight Council (SIFIs) and bank holding companies (BHCs) with $50 billion or more in total consolidated assets (Title I BHCs) to perform supervisory and company-run stress tests. The second (the...
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