Board of Governors of the Federal Reserve System

Washington, DC 20551

December 3, 2018

Mr. Joseph L. Hooley

Chairman and Chief Executive Officer

State Street Corporation

One Lincoln Street

Boston, Massachusetts 02111

Dear Mr. Hooley:

This responds to the request by State Street Corporation ("State Street*'),

Boston, Massachusetts, for a one-year extension oftime, from January 1, 2019, until

January 1, 2020, to comply with the requirement under section 252.62(a)(2) of

Regulation YY to maintain an outstanding eligible long-term debt amount that is no less

than 4.5 percent ofthe firm’s total leverage exposure.1

The Board may extend or accelerate any compliance date under

Regulation YY ifthe Board determines that the extension or acceleration is appropriate.2

In considering whether an extension or acceleration is appropriate, the Board considers

the effect ofthe modification on financial stability, the period oftime for which the

modification would be necessary to achieve compliance with Regulation YY, and the

actions the company is taking to come into compliance with Regulation YY.

In May 2018, the Economic Growth, Regulatory Relief, and Consumer

Protection Act ("EGRRCPA") became law.3 Section 402 of EGRRCPA provides that the

Board and the other federal banking agencies must promulgate rules to exclude certain

central bank placements from the calculation ofthe supplementary leverage ratio for

“custodial banks.” The Board and the other federal banking agencies have not yet

initiated the rulemaking required under section 402.

1 12 CFR 252.62(a)(2).

2 12 CFR 252.3(b).

3 See Pub. L. No. 115-174, 132 Stat. 1296 (2018).
State Street requests a delay in order to determine the appropriate amount

of long-term debt it would need to hold after the federal banking agencies adopt a rule

that implements section 402. It is expected that State Street will be in compliance with

the requirements to maintain outstanding eligible long-term debt and total loss-absorbing

capacity under Subpart G of Regulation YY (other than the LTD-total leverage exposure

requirement) no later than January 1,2019.

In evaluating State Street’s request, the effect ofthe modification on

financial stability, the period oftime for which the modification would be necessary to

achieve compliance with Regulation YY, and the actions the company is taking to come

into compliance with Regulation YY have been considered.4 Granting the request would

not undermine the supervisory or regulatory goals ofthe Board or pose a risk to the

financial stability ofthe U.S. banking or financial system. In addition, it is likely that

State Street will benefit from the rulemaking required under section 402, and requiring

compliance with the requirement to hold long-term debt equal to no less than 4.5 percent

ofthe firm’s total leverage exposure as ofJanuary 1, 2019, would present a temporary

burden on State Street, which is likely to be partially relieved once the rule is adopted.

Based on all the facts and representations set forth in State Street’s request for the

extension and in related correspondence, and acting pursuant to authority delegated by

the Board, I have granted a one-year extension, until January 1, 2020, for State Street to

comply with the requirement under section 252.62(a)(2) ofRegulation YY to maintain an 

outstanding eligible long-term debt amount that is no less than 4.5 percent ofthe firm’s

total leverage exposure.

Any change in the facts presented could result in a different conclusion and

should be reported immediately to supervisory staff at the Federal Reserve Bank of

Boston. For purposes ofthis action, State Street's representations and commitments

constitute conditions imposed in writing in connection with the findings and decision

herein and, as such, may be enforced in proceedings under applicable law.5 This action

should not be construed as granting relief from any other conditions, commitments, or

requirements to which State Street may be subject.

Very truly yours,

4 12 CFR 252.3(b).

5 12 U.S.C. § 1818(b).

Ann E. Misback

Secretary ofthe Board