Dodd-Frank Amendments To Sec 23A Are Problematic: Part 1

Law360, New York (January 7, 2014, 1:29 PM EST) -- Section 23A of the Federal Reserve Act imposes certain quantitative and qualitative limits on “covered transactions” between a Federal Deposit Insurance Corporation-insured bank and its affiliates.[1]

In 2002, the Fed determined that a derivative transaction with an affiliate would not be considered to be a covered transaction provided that the bank had sufficient risk management systems in place and the transaction was on “market terms.”[2]

In 2010, in response to the most severe financial crisis since the Great Depression, Congress passed the Dodd-Frank Wall Street Reform...
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