10/10/2017
Simplification of Basel III Capital Rules
By Thomas W. Killian, Principal - On September 27, 2017, the Board of Governors of the Federal Reserve Board, Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation issued a notice of proposed rulemaking regarding several proposed simplifications (Simplification NPR) of the Basel III capital rules issued in 2013. The Simplification NPR is subject to a 60-day comment period with implementation expected before January 1, 2019. Sandler O’Neill has prepared a report on how this important development will impact capital planning for all regional and community banks.
1/5/2017
Total Loss Absorbing Capacity Final Rule
By Thomas W. Killian, Principal - On December 15, the Federal Reserve Board adopted the final Total Loss Absorbing Capacity (TLAC) rule designed to require additional loss absorbing capacity for Global Systemically Important Banks, thereby avoiding the need for a government bailout in the event of insolvency of a bank that is deemed “too big to fail."
7/6/2016
Liquidity Rules Now the Binding Constraint for Large Banks: Challenges for Large Banks Create Opportunities for Regional and Community Banks
By Thomas W. Killian, Principal - On June 23rd all 33 U.S. bank holding companies with $50 billion or more in assets passed the quantitative component of the Federal Reserve Board’s 2016 Comprehensive Capital and Analysis Review (CCAR) severely adverse case stress test with more than sufficient capital above required minimum levels. On June 29th, 30 of these banks also passed the qualitative component of the CCAR stress test. For these large banks attention has now shifted to liquidity as the binding constraint in planning.
6/28/2016
Comment Letter to the Federal Reserve regarding Covered Debt
Sandler O'Neill submitted a comment letter to Juan Carlos Climent, Board of Governors of the Federal Reserve System, as a follow up to the firm's previous TLAC letter that was sent on January 20, 2016.
1/29/2016
FAQs: Bank Investment in Other Financial Institution Debt and Capital
By Thomas W. Killian, Principal - The firm provides answers to frequently asked questions in regard to bank investments in other financial institutions debt and capital.
1/20/2016
Comment Letter to the Federal Reserve regarding TLAC
Sandler O'Neill submitted a comment letter to Janet Yellen, Chair of the Federal Reserve, regarding the proposed rules for Total Loss-Absorbing Capacity.
1/15/2016
Total Loss Absorbing Capacity (TLAC): Material Repercussions and Disruptions for U.S. Banks and Investors
By Thomas W. Killian, Principal - Following the initial TLAC disclosure by the Financial Stability Board (FSB) on November 10, 2014, the Board of Governors of the Federal Reserve System (Board) announced on October 30, 2015 a Notice of Proposed Rulemaking (NPR) for TLAC rules, with comments due by February 1, 2016. TLAC is designed to provide additional loss absorbing capacity for Global Systemically Important Banks (GSIBs) to avoid the need for a government bail-out in the event of insolvency of a bank that is deemed to be “too big to fail.”
4/20/2015
Changes to Small BHC Policy Statement - Implications for M&A, Capital Planning, and Investment Strategy
By Thomas W. Killian, Principal - The Federal Reserve’s Small Bank Holding Company Policy Statement provides a very real opportunity for 88% of U.S. BHCs to optimize their M&A Strategy, Capital Planning, and Investment Strategy.
1/15/2014
Collins Amendment Carve Out
By Thomas W. Killian, Principal - In response to industry pressure, the OCC, Board, FDIC, SEC and CFTC announced on January 14, an Interim Final Rule1 effective April 1, 2014 that would permit banking entities to retain investments in collateralized debt obligations that have a majority of their assets invested in Qualifying Trust Preferred Securities Collateral defined as TruPS or subordinated debt that was issued prior to May 19, 2010, by a depository institution holding company with less than $15 billion in consolidated assets as of the end of any reporting period in the 12 months immediately preceding the issuance of such instrument; or issued prior to May 19, 2010, by a mutual holding company.
12/13/2013
The Volcker Rule’s Impact on Regional and Community Banks
by Thomas W. Killian, Principal - The Volcker Rule restricts U.S. banks from investing in funds with collateral comprised of less than 100% loans that are not registered with the SEC and from engaging in hedging activities that do not hedge a specific identified risk. We examine the rule's impact and outline changes in bank investment and hedging strategies.
7/30/2013
Impact of Final Basel III Capital Ratios on U.S. Banking Organizations
by Thomas W. Killian, Principal - The OCC, Fed, and the FDIC have issued reports that will go a long way toward finalizing how Basel III capital rules will apply to U.S. depositories. We summarize the rules and key changes from previous guidance on how U.S. agencies will apply Basel III rules to U.S. institutions and highlight significant changes in capital planning, M&A strategy, and investment strategy.
9/20/2012
Sandler O'Neill Comment Letter on on Basel III bank capital rules jointly proposed by the OCC, FRB, and FDIC
Sandler O'Neill comprehensively states the firm’s position on the historic bank capital regulations now under consideration. Divided into 11 distinct topics, Sandler O'Neill seeks to contribute constructively to a rulemaking process that enhances the safety and soundness of U.S. banks without sacrificing their efficiency and competitiveness or damaging the U.S. financial system.
9/6/2012
Sandler O'Neill Comment Letter on the Basel III inclusion in regulatory capital of unrealized gains and losses on AFS securities
We urge the federal agencies to to reject the Basel III inclusion in regulatory capital of unrealized gains and losses on AFS securities. The flawed underlying accounting treatment does not reflect the banking business model and the proposed application to the capital accounts of banks would be unsafe and unsound for banks and detrimental to investors in banks.
6/21/2012
U.S. Basel III Capital Rules - Broad Application with Substantial Increase in Complexity and Required Capital
by Thomas W. Killian, Principal - Banks will face several new challenges when the Basel III capital standards become U.S. regulations as perscribed by the Fed's Notice of Proposed Rulemaking. Many speculated that the rules would only affect large banks, but the Fed is applying them to all insured depository institutions, savings and loan holding companies, and all bank holding companies with $500 million or more in assets.