In this report, we build on our coverage Monday of FDIC Vice Chairman Hoenig’s proposal to restructure diversified U.S. banks along lines suggested during his confirmation by Treasury Secretary Mnuchin (see Client report REFORM133). We are calling this plan “FHC-heavy” because of its reliance on the financial holding company (FHC) framework established by the Gramm-Leach-Bliley Act in concert with significant changes to insulate insured depositories and enhance overall holding-company resilience. As previously noted, the White House last week reaffirmed the President’s commitment to what Mr. Mnuchin called a “21st-Century Glass-Steagall.” We shall shortly provide clients with an in-depth report on this approach’s overall framework, strategic impact, and political outlook.
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