BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, DC 20551

March 13, 2019

Mr. Scott Freidenrich

Executive Vice President and Global Treasurer
The Bank of New York Mellon Corporation
101 Barclay Street

New York, New York 10286

Dear Mr. Freidenrich:

This responds to the request by The Bank of New York Mellon Corporation
(“BNY Mellon”), New York, New York, for a one-year extension of time, 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 of the firm’s total leverage exposure. !

The Board may extend or accelerate any compliance date under
Regulation YY if the Board determines that the extension or acceleration is appropriate.”
In considering whether an extension or acceleration is appropriate, the Board considers
the effect of the modification on financial stability, the period of time 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.> 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 of the supplementary leverage ratio for
“custodial banks.” The Board and the other federal banking agencies have not yet issued
a proposed rule to implement section 402.

' 12 CFR 252.62(a)(2).
2 12 CFR 252.3(b).
> See Pub. L. No. 115-174, 132 Stat. 1296 (2018).

wwwfederalreserve.gov


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A delay would permit BNY Mellon 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.

In evaluating BNY Mellon’s request, I have considered the effect of the
modification on financial stability, the period of time 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.* Granting the request would not
undermine the supervisory or regulatory goals of the Board or pose a risk to the financial
stability of the U.S. banking or financial system. In addition, requiring compliance with
the requirement to hold long-term debt equal to no less than 4.5 percent of the firm’s total
leverage exposure during the extension period would impose a temporary burden on
BNY Mellon, which is likely to be partially relieved once a rule under section 402 is
adopted. Based on all the facts and representations set forth in BNY Mellon’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 BNY
Mellon 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 of
the 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 New
York. For purposes of this action, BNY Mellon’s 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.° This action should not be construed as
granting relief from any other conditions, commitments, or requirements to which BNY
Mellon may be subject, including 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), which came into effect on January 1,
2019.

Sincerely yours,

steaagthhGledbey Shanks
Deputy Secretary of the Board

4 12 CFR 252.3(b).
> 12 CFR 265.5(a)(2).
® 12 U.S.C. § 1818(b).