Luigi L. De Ghenghi

Mr. De Ghenghi is a partner in Davis Polk’s Financial Institutions Group. [Full Bio]

Latest Articles

The Federal Reserve has requested comment on a highly anticipated notice of proposed rulemaking to amend its regulatory framework for deciding when a company exercises a controlling influence over another company under the Bank Holding Company Act and the Home Owners’ Loan Act. The proposal is a welcome step in the right direction.  It would provide greater transparency, certainty and predictability, and relax some of the limits and restrictions in the Federal Reserve’s existing practices…
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 Federal Reserve, FDIC and OCC (the Agencies) have each released proposed amendments to their respective stress testing rules for national banks, savings associations, state member banks and state non-member banks (collectively, IDIs) that would implement Section 401 of the Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 (the EGRRCPA) as it applies to supervisory and company-run stress testing requirements (the Proposals).[1]  The Proposals generally address company-run stress testing requirements for…
As 2018 came to a close, U.S. financial regulators continued to pursue anti-money laundering (“AML”) enforcement actions against financial institutions, announcing monetary penalties against and resolutions with three U.S. broker-dealers.  The Financial Crimes Enforcement Network (“FinCEN”), the Securities and Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority (“FINRA”) announced on December 17, 2018 that they had issued parallel fines against UBS Financial Services Inc. (“UBSFS”) totaling $14.5 million for willful failures to comply with…
In the decade leading up to the 2008 financial crisis, de novo bank charters averaged more than 100 per year.[1] This robust flow of new bank charters continued a trend since the 1960s and before.[2] It partially offset a decline in the number of banks in the United States that resulted mainly from the consolidation of the U.S. banking industry. In contrast, only 11 new bank charters have been approved since the 2008…
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 future of resolution planning for U.S. global systemically important banking organizations (G-SIBs) has started to come into focus.  The FDIC and the Federal Reserve have recently laid out an ambitious agenda designed to put in place Resolution Planning 2.0.  This slide sets forth our collection of the publicly known elements of that agenda, as drawn from speeches, testimony and the cadence of agency review of resolution plans. The most recent of these speeches is…
The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and the federal banking regulators have taken a small step towards improving the BSA/AML compliance framework for depository institutions.  These agencies issued a Joint Statement on Banks and Credit Unions Sharing Resources to Improve Efficiency and Effectiveness of Bank Secrecy Act Compliance (Joint Statement) on October 3, 2018 to address ways in which small banks and credit unions may enter into collaborative arrangements to share resources to…
This blog post lays out the pros and cons that boards and senior management of regional and community banking organizations should consider in light of the Zions decision to shed its bank holding company.[1]  Some have suggested that directors of BHCs now have a fiduciary duty to consider shedding their holding company structure.  This is too strong a recommendation in our view.  There are many pros and cons to eliminating a BHC, and whether doing…
Guidance is guidance, and rules are rules.  This straightforward statement was reiterated by Treasury Secretary Mnuchin, Federal Reserve Vice Chairman for Supervision Randal Quarles and Comptroller of the Currency Joseph Otting in separate Congressional hearings earlier this year.[1]  Nevertheless, for at least the past ten years, the failure to be in compliance with some guidance has often been treated as binding on banking organizations.  It has often been used as the basis for…