Single-counterparty credit limits (SCCL) is US
banks’ top concern under Dodd-Frank at present,
with a bankers’ counsel describing it as Volcker
The Federal Reserve’s proposed
restrictions to SCCL have been deemed an overcorrection which
could cripple US liquidity.
"As drafted, it requires major US banking entities
to significantly overstate their credit exposure to other
financial institutions which would, I think everyone fears,
result in a pullback on lending and providing customer-oriented
access to derivative clients," a bankers’ counsel
"This in a way is Volcker II. As written, it would
have a very contracting effect on the market," he added.
The Federal Reserve’s suggested SCCL changes
implement section 165(e) of Dodd-Frank and aim to limit the
concentration of risk in the financial system...