Feb. 11, 2023
Dear Sir or Madame, to try to eliminate and/or lower third party credit rating requirements increases the risk to the OCC. Instead of this, the OCC should take into consideration lowered credit worthiness with commensurate increases in capital and margin requirements. Failing to require and incentivize Clearing Members and Clearing Banks to properly manage risk is simply not acceptable after the Global Financial Crisis we have all seen. The Bank for International Settlements has a paper on taking the three-lines-of-defence model further to reflect specific governance features of regulated financial institutions: https://www.bis.org/fsi/fsipapers11.htm Consistent with this paper regarding "four lines of defense", proposed changes to reduce external audit, supervision, and credit ratings introduces weaknesses into Risk Management models allowing more banking scandals, failures, and bankruptcies to occur. So I am against this proposal. Best regards, Lars Wohlfahrt