Joint Release
Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
Office of the Comptroller of the Currency
Office of Thrift Supervision
For immediate release September 5, 2006
Agencies Seek Public Comment on Basel II and Market Risk Proposed
Rulemakings
The federal bank and thrift regulatory agencies announced today that they will request
public comment on a notice of proposed rulemaking (NPR) that would implement new
risk-based capital requirements in the United States for large, internationally active
banking organizations. The NPR details the agencies' plans for implementing the Basel
Committee on Banking Supervision's (BCBS) new capital accord (Basel II) that was
issued in 2004. The agencies also will request comment on proposed Basel II
supervisory reporting templates.
The Federal Reserve Board (Board), the Federal Deposit Insurance Corporation (FDIC),
the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision
(OTS) first adopted risk-based capital standards in 1989. Those standards were based
on the Basel Capital Accord that the BCBS originally issued in 1988 (Basel I). For
banking organizations that meet qualifying criteria, the Basel II NPR would replace U.S.
rules implementing Basel I. The proposed framework would be mandatory for large,
internationally active banking organizations and optional for others.
In March of this year, the Board released a preliminary draft of the Basel II NPR. The
version being made available today differs in some respects from the March draft. For
example, the agencies have responded to certain requests from the industry to seek
comment on alternative risk-based capital approaches and have clarified that in
evaluating credit risk, banking organizations should not rely on the possibility of U.S.
government financial assistance, except for the financial assistance that the government
has legally committed to provide. The final document, which will be published in the
Federal Register shortly, should be used as the basis for comments.
Separately, the agencies announced that they will request comment on proposed
revisions to the market risk capital rules that the OCC, Board, and FDIC have used
since 1997 for banking organizations with significant exposure to market risk. Under the
market risk capital rule, certain banking organizations are required to calculate a capital
requirement for the general market risk of their covered positions and the specific risk of
their covered debt and equity positions. The proposed revisions would enhance the
rule's risk sensitivity and would require public disclosures of certain qualitative and
quantitative market risk information.
The notice of proposed rulemaking on the market risk capital rule would implement
changes the BCBS approved in 2005 and also would apply to certain savings
associations, which currently are not covered under the rule. The agencies will also
Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
Office of the Comptroller of the Currency
Office of Thrift Supervision
For immediate release September 5, 2006
Agencies Seek Public Comment on Basel II and Market Risk Proposed
Rulemakings
The federal bank and thrift regulatory agencies announced today that they will request
public comment on a notice of proposed rulemaking (NPR) that would implement new
risk-based capital requirements in the United States for large, internationally active
banking organizations. The NPR details the agencies' plans for implementing the Basel
Committee on Banking Supervision's (BCBS) new capital accord (Basel II) that was
issued in 2004. The agencies also will request comment on proposed Basel II
supervisory reporting templates.
The Federal Reserve Board (Board), the Federal Deposit Insurance Corporation (FDIC),
the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision
(OTS) first adopted risk-based capital standards in 1989. Those standards were based
on the Basel Capital Accord that the BCBS originally issued in 1988 (Basel I). For
banking organizations that meet qualifying criteria, the Basel II NPR would replace U.S.
rules implementing Basel I. The proposed framework would be mandatory for large,
internationally active banking organizations and optional for others.
In March of this year, the Board released a preliminary draft of the Basel II NPR. The
version being made available today differs in some respects from the March draft. For
example, the agencies have responded to certain requests from the industry to seek
comment on alternative risk-based capital approaches and have clarified that in
evaluating credit risk, banking organizations should not rely on the possibility of U.S.
government financial assistance, except for the financial assistance that the government
has legally committed to provide. The final document, which will be published in the
Federal Register shortly, should be used as the basis for comments.
Separately, the agencies announced that they will request comment on proposed
revisions to the market risk capital rules that the OCC, Board, and FDIC have used
since 1997 for banking organizations with significant exposure to market risk. Under the
market risk capital rule, certain banking organizations are required to calculate a capital
requirement for the general market risk of their covered positions and the specific risk of
their covered debt and equity positions. The proposed revisions would enhance the
rule's risk sensitivity and would require public disclosures of certain qualitative and
quantitative market risk information.
The notice of proposed rulemaking on the market risk capital rule would implement
changes the BCBS approved in 2005 and also would apply to certain savings
associations, which currently are not covered under the rule. The agencies will also
seek comment on proposed supervisory reporting templates related to the market risk
capital rule.
The Board, FDIC, OCC and OTS request comments on the proposals within 120 days
of publication in the Federal Register. The proposals are attached.
The agencies remain committed to issuing in the near future additional proposed
revisions to their existing risk-based capital rules, known as Basel IA, in a timeframe
that will allow for overlapping comment periods for both the Basel II NPR and the NPR
for the proposed Basel IA revisions.
Basel II
Notice of proposed rulemaking
Federal Register notice regarding supervisory reporting templates - PDF 501k (PDF
Help)
Market risk
Notice of proposed rulemaking - PDF 291k (PDF Help)
Federal Register notice regarding supervisory reporting templates - PDF 71k (PDF
Help)
# # #
Attachments:
FDIC Board Meetings
Media Contacts:
Federal Reserve Susan Stawick (202) 452-2955
FDIC David Barr (202) 898-6992
OCC Kevin Mukri (202) 874-5770
OTS Katie Fitzgerald (202) 906-6677
FDIC: PR-82-2006
capital rule.
The Board, FDIC, OCC and OTS request comments on the proposals within 120 days
of publication in the Federal Register. The proposals are attached.
The agencies remain committed to issuing in the near future additional proposed
revisions to their existing risk-based capital rules, known as Basel IA, in a timeframe
that will allow for overlapping comment periods for both the Basel II NPR and the NPR
for the proposed Basel IA revisions.
Basel II
Notice of proposed rulemaking
Federal Register notice regarding supervisory reporting templates - PDF 501k (PDF
Help)
Market risk
Notice of proposed rulemaking - PDF 291k (PDF Help)
Federal Register notice regarding supervisory reporting templates - PDF 71k (PDF
Help)
# # #
Attachments:
FDIC Board Meetings
Media Contacts:
Federal Reserve Susan Stawick (202) 452-2955
FDIC David Barr (202) 898-6992
OCC Kevin Mukri (202) 874-5770
OTS Katie Fitzgerald (202) 906-6677
FDIC: PR-82-2006