On April 26, 2016, the Federal Deposit Insurance Corporation (the “FDIC”) proposed a rule (the “Proposed Rule”) that would implement a quantitative long-term liquidity requirement—the net stable funding ratio (“NSFR”)—for large and internationally active banking organizations. The Office of the Comptroller of the Currency (the “OCC”) and the Board of Governors of the Federal Reserve System (“the Federal Reserve”) are expected to propose substantially identical versions of the Proposed Rule shortly. The Proposed Rule would be effective January 1, 2018. Comments are due to the Agencies by August 5, 2016.

The Proposed Rule aims to promote the stability of banking organizations covered by the Proposed Rule (“covered companies”) and across the U.S. financial sector by requiring covered companies to be in a position to fund themselves over a one-year time horizon. In the expectation that disruptions to a banking organization’s regular sources of funding may compromise its liquidity position, the Proposed Rule seeks to ensure that covered companies maintain sufficient liquidity profiles to support their activities in times of economic stress. The Proposed Rule is consistent with the October 2014 and June 2015 Basel Committee on Banking Supervision (“BCBS”) NSFR standards, and it complements the Agencies’ prior line of rules pertaining to liquidity management and liquidity risk for large banking organizations. The Proposed Rule also reflects the goals of the Dodd-Frank Act, to promote the safety and soundness of the U.S. financial markets.