Fed's new rating system for large financial institutions

On August 3rd, the Federal Reserve (Fed) proposed for comment a new supervisory rating system to assess the safety and soundness of Large Financial Institutions (LFIs). This is the first change to the Fed’s supervisory rating system since the financial crisis, and aims to simplify and clarify the existing five-component supervisory assessment process by assigning ratings across three pillars: (1) capital, (2) liquidity, and (3) the effectiveness of governance and controls.

  1. Doubling down on capital and liquidity.
  2. All in on governance.
  3. Simpler rating system, same expectations.
  4. Reliance on the primary supervisor for depository institutions.
  5. Resolution plans on deck?

First take

A publication of PwC's financial services regulatory practice

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Julien Courbe
US Financial Services Advisory Leader
Tel: +1 (646) 471 4771

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