Banks feel chill of exposure from Fed’s SCCL

US rules on counterparty credit limit pose challenges for risk and regulatory teams despite proposed delay, says expert

US regulations
Risk.net montage

Basel’s large exposures framework is a central plank of regulatory efforts to prevent concentration of risk between big banking organisations and their counterparties. The objective is to ensure financial institutions extend a safe level of credit to a single counterparty.

That raises a question: how can authorities put a number on safe?

The US Federal Reserve has come up with two numbers: 15% and 25%. In the US, large banks must not take exposure to any one entity that adds up to more than 25

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: