Andrew Rohrkemper

Mr. Rohrkemper is an associate in Davis Polk's Financial Institutions Group. [Full Bio]

Latest Articles

The U.S. banking agencies have proposed allowing custodial banking organizations to exclude certain central bank deposits from the calculation of total leverage exposure, the denominator of the U.S. Basel III supplementary leverage ratio (SLR).  The proposal implements Section 402 of the Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 (EGRRCPA).  The three U.S. banking organizations that would benefit from this proposal are BNY Mellon, Northern Trust and State Street. Scope of Relief The…
The move away from a one-size-fits-all regulatory framework based on asset size continues. On October 31, the Federal Reserve proposed a rule to implement Section 401 of the Economic Growth, Regulatory Relief and Consumer Protection Act, tailoring enhanced prudential standards for firms with $100 billion or more in total consolidated assets, and the three U.S. banking agencies proposed corresponding tailoring of their Basel III capital and liquidity rules. Overall, the proposals would: for U.S. GSIBs,…
The three Federal banking agencies jointly released an interim final rule on August 22, 2018 that amends the agencies’ respective liquidity coverage ratio (LCR) rules to treat as level 2B high-quality liquid assets (HQLAs) any municipal obligation that is both (1) “liquid and readily marketable” and (2) “investment grade.”  The amendment implements Section 403 of the Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 (the EGRRCPA).  Our visual memorandum on the EGRRCPA is…
The Basel Committee on Banking Supervision last week published a revised assessment methodology to determine whether a banking organization is a global systemically important bank (“GSIB”) and a GSIB’s associated capital surcharge requirement.  The revised methodology reflects the following changes from the current methodology, which are expected to be implemented in member jurisdictions by January 2021 and to determine the GSIBs’ applicable capital surcharge requirements from January 2023: Revisions to the substitutability category, including…
The Federal Reserve last week released the results of its 2018 Comprehensive Capital Analysis and Review  (CCAR).  We have analyzed the 2018 CCAR results, along with the Dodd-Frank Act Stress Test results published the previous week, and have prepared a graphical summary available here.  As our summary shows, on average the stress losses for the firms subject to CCAR in 2018—measured by impact on CET1 risk-based capital ratios—were 33% higher compared to the 2017…
The Federal Reserve and the OCC have proposed a rule that would recalibrate the enhanced supplementary leverage ratio (eSLR) requirements applicable to U.S. GSIBs and their insured depository institution (IDI) subsidiaries, and related requirements, by tailoring the eSLR levels to 50 percent of each firm’s GSIB surcharge.  The proposal would make the eSLR requirements and related total loss absorbing capacity (TLAC) requirements for GSIB holding companies and the well-capitalized Prompt Corrective Action (PCA) framework for…
The Stress Buffer Requirements (SBR) Proposal would fundamentally restructure how the Federal Reserve’s stress testing and capital planning framework is used to impose capital requirements for large banking organizations.  In general, the proposal would shift the quantitative capital requirements based on a firm’s pro forma stress losses, which currently are calculated and used only for purposes of the Federal Reserve’s Comprehensive Capital Adequacy Review (CCAR), into two new capital buffer requirements known as the stress…
The Senate passed the Economic Growth, Regulatory Relief and Consumer Protection Act (S.2155) on March 14 by a filibuster-proof vote of 67 – 31.  The Senate bill still must pass the House, where Rep. Jeb Hensarling (R-TX) and other representatives have said they plan to propose a series of amendments to the bill.  Today, we published a visual memorandum here summarizing the most material provisions of the Senate bill affecting the regulation of banking organizations.…
The Bipartisan Banking Bill would provide banking organizations with relief from their stress testing, capital and liquidity requirements by adjusting the thresholds, frequency and substance of these rules.  The bill – which recently passed in the Senate, as described in a recent post here – is now being considered in the House, where Rep. Jeb Hensarling (R-TX) and other representatives have said they plan to propose a series of amendments. This post summarizes how the…
The Senate has passed the Bipartisan Banking Bill, which would raise the generally applicable statutory threshold for most enhanced prudential standards (EPS) from $50 billion to $250 billion in total consolidated assets and would provide other targeted relief to regional and community banks.  It would also make a narrow change to the calculation of the Supplementary Leverage Ratio for certain custody banks. As passed by the Senate, the Bipartisan Banking Bill includes some changes from…