Large Bank Examination Workshop February 2026

The Dodd-Frank Act

• Derivatives requires standardized derivative products to be traded on exchanges and cleared through central clearing houses • Requires higher capital requirements for custom products • Bans banks from some of their derivatives dealing operations • Imposes capital and margin requirements on firms dealing in derivatives

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The Dodd-Frank Act • Capital Requirements regulation and supervision of financial institutions to ensure that they have enough capital to cope with the amount of risk they take. • AIG’s capital was obviously not high enough • Bank’s sponsoring SPVs point to need for capital requirements of OBS operations • Increased regulation for too-big-to-fail operations • Capital requirements need to be countercyclical • Should create formal stress testing requirements

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