Prepping FR Y-15 Reporting In The Age Of COVID-19: A Minefield For FBOs And Domestic Banks

FR Y-15 reporting's new daily/monthly average calculations and COVID-19 concerns prompt banks to think strategically

In October 2019, the U.S. Federal Reserve issued new requirements for the FR Y‑15 Banking Organization Systemic Risk Report. Foreign banking organizations (FBOs) in the U.S. immediately grasped that implementing the revisions would be a very tough nut to crack. Domestic banks also concluded that it would be no walk in the park, with many recognizing the need to reduce reliance upon manual processes and strengthen their operational approaches to FR Y‑15 reporting. They could see needed overhauls coming. 

Big And Strategic For Everyone 

No matter the implementation challenges, it is obvious that financial institutions must treat the FR Y‑15 as a core regulatory report – imparting to it the same strategic priority that they give to other significant reports including the FR Y‑9C, FR Y‑14, and FR 2052a. And there is one more crucial element involved. The FR Y‑15 provides the metrics for thresholds that determine the enhanced prudential supervision risk-based tier for capital and liquidity compliance purposes. Thus, the banks’ ongoing reporting status depends upon it; they must have the capability to monitor it closely – and dynamically. 

Complex And Cross-Functional  

To prepare for FR Y-15 reporting on time, banks must implement new daily/monthly averages for key reporting calculations for the majority of FR Y‑15 reportable line items. And FBOs are under even more pressure because they must initiate CUSO-level reporting.  

With COVID‑19 continuing to disrupt the markets and regulators beginning to react with changes (temporary or permanent) including the new requirements for daily liquidity reporting, any ideas about easing into the FR Y‑15 reporting revision are disappearing fast. 

Financial institutions require transparency across all processes to efficiently comply with FR Y‑15 and its reporting nexus. This is an opportune moment for banks to reassess their approach to FR Y-15 from a strategic perspective.

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