Under section 716, U.S. insured depository institutions and U.S. branches and agencies of foreign banks will be required to “push out” certain types of derivatives dealing activities to affiliated entities. The global effects of the swaps push-out provision are multifaceted.
And the size of a bank relative to the country’s total banking assets could also play a role. Both quantitative and qualitative criteria need to be assessed when considering where to draw the line between small and large banks. To sum up, small banks are generally less risky than larger ones. So a proportionate approach to regulating and supervising small banks is indeed appropriate.