The Federal Reserve Board announced that the aggregate financial sector liabilities equaled approximately $21.6 trillion, according to the Fed's first-ever determination of aggregate consolidated liabilities for all financial companies released on Wednesday.
According to the Fed, the amount of total liabilities for the financial sector – $21,632,232,035,000 – will measure the aggregate consolidated liabilities for the purpose of section 622 of the Dodd-Frank Act for a one-year period from July 1, 2015, through June 30, 2016. Section 622 of Dodd-Frank, implemented by the Board's Regulation XX, prohibits a merger between two financial companies or one financial company from acquiring another if the resulting merged company's liabilities exceed 10 percent of the aggregate financial sector liabilities.
Insured depository institutions, bank holding companies, savings and loan holding companies, foreign banking organizations, companies that control insured depository institutions, and nonbank financial companies designated for Board supervision by the Financial Stability Oversight Council (FSOC) are among the financial companies that are subject to the limit on financial company mergers and acquisitions imposed by section 622 of Dodd-Frank.
The Fed will publish the aggregated consolidated liabilities by July 1 of each subsequent year. For the first period, which ran from July 1, 2015, to June 30, 2016, aggregate financial sector liabilities equaled financial sector liabilities calculated as of December 31, 2014; for all subsequent periods, the aggregate financial sector liabilities will equal the average of financial sector liabilities as of December 31 for the two preceding calendar years.
According to the Fed, the total of aggregate financial sector liabilities equals the sum of all financial companies' financial sector liabilities. For bank holding companies and insured depository institutions (calculated under applicable risk-based capital rules), financial sector liabilities equaled the difference between risk-weighted assets and total regulatory capital. For savings and loan holding companies, nonbank financial companies supervised by the Board, bank holding companies with total consolidated assets of less than $1 billion, and U.S. depository institution holding companies that are not bank holding companies or savings and loan holding companies, financial sector liabilities equal liabilities calculated in accordance with applicable accounting standards, according to the Fed.