44620 Federal Register / Vol. 73, No. 148 / Thursday, July 31, 2008 / Rules and Regulations
1 Collectively referred to in the guidance as
‘‘banks’’.
issued under sec. 184 (42 U.S.C. 2234) and
sec. 189, 68 Stat. 955 (42 U.S.C. 2239).
Appendix A also issued under sec. 6, Pub. L.
91–550, 84 Stat. 1473 (42 U.S.C. 2135).
2. In § 2.309, paragraph (b)(3)(ii) is
removed; paragraph (b)(3)(iii) is
redesignated as (b)(3)(ii), and paragraph
(b)(3)(i) is revised to read as follows:
§ 2.309 Hearing requests, petitions to
intervene, requirements for standing, and
contentions.
* * * * *
(b) * * *
(3) * * *
(i) The time specified in any notice of
hearing or notice of proposed action or
as provided by the presiding officer or
the Atomic Safety and Licensing Board
designated to rule on the request and/
or petition, which may not be less than
sixty (60) days from the date of
publication of the notice in the Federal
Register; or
* * * * *
PART 50—DOMESTIC LICENSING OF
PRODUCTION AND UTILIZATION
FACILITIES
3. The authority citation for part 50
continues to read as follows:
Authority: Secs. 102, 103, 104, 161, 182,
183, 186, 189, 68 Stat. 936, 937, 938, 948,
953, 954, 955, 956, as amended, sec. 234, 83
Stat. 444, as amended (42 U.S.C. 2132, 2133,
2134, 2135, 2201, 2232, 2233, 2236, 2239,
2282); secs. 201, as amended, 202, 206, 88
Stat. 1242, as amended, 1244, 1246 (42 U.S.C.
5841, 5842, 5846); sec. 1704, 112 Stat. 2750
(44 U.S.C. 3504 note); sec. 651(e), Pub. L.
109–58, 119 Stat. 806–810 (42 U.S.C. 2014,
2021, 2021b, 2111). Section 50.7 also issued
under Pub. L. 95–601, sec. 10, 92 Stat. 2951
(42 U.S.C. 5841). Section 50.10 also issued
under secs. 101, 185, 68 Stat. 955, as
amended (42 U.S.C. 2131, 2235); sec. 102,
Pub. L. 91–190, 83 Stat. 853 (42 U.S.C. 4332).
Sections 50.13, 50.54(dd), and 50.103 also
issued under sec. 108, 68 Stat. 939, as
amended (42 U.S.C. 2138).
Sections 50.23, 50.35, 50.55, and 50.56 also
issued under sec. 185, 68 Stat. 955 (42 U.S.C.
2235). Sections 50.33a, 50.55a and Appendix
Q also issued under sec. 102, Pub. L. 91–190,
83 Stat. 853 (42 U.S.C. 4332). Sections 50.34
and 50.54 also issued under sec. 204, 88 Stat.
1245 (42 U.S.C. 5844). Sections 50.58, 50.91,
and 50.92 also issued under Pub. L. 97–415,
96 Stat. 2073 (42 U.S.C. 2239). Section 50.78
also issued under sec. 122, 68 Stat. 939 (42
U.S.C. 2152). Sections 50.80–50.81 also
issued under sec. 184, 68 Stat. 954, as
amended (42 U.S.C. 2234). Appendix F also
issued under sec. 187, 68 Stat. 955 (42 U.S.C.
2237).
§ 50.41 [Amended]
4. In § 50.41, paragraph (c) is removed
and reserved.
5. Section 50.42 is revised to read as
follows:
§ 50.42 Additional standard for class 103
licenses.
In determining whether a class 103
license will be issued to an applicant,
the Commission will, in addition to
applying the standards set forth in
§ 50.40, consider whether the proposed
activities will serve a useful purpose
proportionate to the quantities of special
nuclear material or source material to be
utilized.
Dated at Rockville, Maryland, this 21st day
of July, 2008.
For the Nuclear Regulatory Commission.
R.W. Borchardt,
Executive Director for Operations.
[FR Doc. E8–17436 Filed 7–30–08; 8:45 am]
BILLING CODE 7590 –01–P
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 3
[Docket ID OCC–2008–0009]
FEDERAL RESERVE SYSTEM
12 CFR Parts 208 and 225
[Docket No. OP–1322]
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 325
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 567
[Docket No. 2008–0008]
Supervisory Guidance: Supervisory
Review Process of Capital Adequacy
(Pillar 2) Related to the Implementation
of the Basel II Advanced Capital
Framework
AGENCIES: Office of the Comptroller of
the Currency, Treasury (OCC); Board of
Governors of the Federal Reserve
System (Board); Federal Deposit
Insurance Corporation (FDIC); and
Office of Thrift Supervision, Treasury
(OTS) (collectively, the agencies).
ACTION: Final supervisory guidance.
SUMMARY: The agencies are publishing
guidance regarding the supervisory
review process for capital adequacy
(Pillar 2) provided in the Basel II
advanced approaches final rule, which
was published in the Federal Register
on December 7, 2007 (advanced
approaches final rule). The supervisory
review process described in this
guidance outlines the agencies’
standards for satisfying the qualification
requirements provided in the advanced
approaches final rule; addressing the
limitations of the minimum risk-based
capital requirements for credit risk and
operational risk; ensuring that each
institution has a rigorous process for
assessing its overall capital adequacy in
relation to its risk profile and a
comprehensive strategy for maintaining
appropriate capital levels; and
encouraging each institution to improve
its risk identification and measurement
techniques. This supervisory guidance
applies to any bank, savings association,
or bank holding company 1
implementing the advanced approaches
final rule.
DATES: This guidance is effective
September 2, 2008. Comments on the
Paperwork Reduction Act portion of this
document may be submitted on or
before September 2, 2008.
ADDRESSES: Comments on the
Paperwork Reduction Act portion of this
document should be addressed to:
OCC: Communications Division,
Office of the Comptroller of the
Currency, Public Information Room,
Mailstop 1–5, Attention: 1557–NEW,
250 E Street, SW., Washington, DC
20219. In addition, comments may be
sent by fax to (202) 874–4448, or by
electronic mail to
regs.comments@occ.treas.gov. You may
personally inspect and photocopy the
comments at the OCC’s Public
Information Room, 250 E Street, SW.,
Washington, DC 20219. For security
reasons, the OCC requires that visitors
make an appointment to inspect
comments. You may do so by calling
(202) 874–5043. Upon arrival, visitors
will be required to present valid
government-issued photo identification
and submit to security screening in
order to inspect and photocopy
comments.
Board: You may submit comments,
identified by OP–1322, by any of the
following methods:
• Agency Web Site: http://
www.federalreserve.gov. Follow the
instructions for submitting comments at
http://www.federalreserve.gov/.
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• Fax: (202) 452–3819 or (202) 452–
3102.
• Mail: Jennifer J. Johnson, Secretary,
Board of Governors of the Federal
Reserve System, 20th Street and
VerDate Aug<31>2005 15:05 Jul 30, 2008 Jkt 214001 PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 E:\FR\FM\31JYR1.SGM 31JYR1
yshivers on PROD1PC62 with RULES
1 Collectively referred to in the guidance as
‘‘banks’’.
issued under sec. 184 (42 U.S.C. 2234) and
sec. 189, 68 Stat. 955 (42 U.S.C. 2239).
Appendix A also issued under sec. 6, Pub. L.
91–550, 84 Stat. 1473 (42 U.S.C. 2135).
2. In § 2.309, paragraph (b)(3)(ii) is
removed; paragraph (b)(3)(iii) is
redesignated as (b)(3)(ii), and paragraph
(b)(3)(i) is revised to read as follows:
§ 2.309 Hearing requests, petitions to
intervene, requirements for standing, and
contentions.
* * * * *
(b) * * *
(3) * * *
(i) The time specified in any notice of
hearing or notice of proposed action or
as provided by the presiding officer or
the Atomic Safety and Licensing Board
designated to rule on the request and/
or petition, which may not be less than
sixty (60) days from the date of
publication of the notice in the Federal
Register; or
* * * * *
PART 50—DOMESTIC LICENSING OF
PRODUCTION AND UTILIZATION
FACILITIES
3. The authority citation for part 50
continues to read as follows:
Authority: Secs. 102, 103, 104, 161, 182,
183, 186, 189, 68 Stat. 936, 937, 938, 948,
953, 954, 955, 956, as amended, sec. 234, 83
Stat. 444, as amended (42 U.S.C. 2132, 2133,
2134, 2135, 2201, 2232, 2233, 2236, 2239,
2282); secs. 201, as amended, 202, 206, 88
Stat. 1242, as amended, 1244, 1246 (42 U.S.C.
5841, 5842, 5846); sec. 1704, 112 Stat. 2750
(44 U.S.C. 3504 note); sec. 651(e), Pub. L.
109–58, 119 Stat. 806–810 (42 U.S.C. 2014,
2021, 2021b, 2111). Section 50.7 also issued
under Pub. L. 95–601, sec. 10, 92 Stat. 2951
(42 U.S.C. 5841). Section 50.10 also issued
under secs. 101, 185, 68 Stat. 955, as
amended (42 U.S.C. 2131, 2235); sec. 102,
Pub. L. 91–190, 83 Stat. 853 (42 U.S.C. 4332).
Sections 50.13, 50.54(dd), and 50.103 also
issued under sec. 108, 68 Stat. 939, as
amended (42 U.S.C. 2138).
Sections 50.23, 50.35, 50.55, and 50.56 also
issued under sec. 185, 68 Stat. 955 (42 U.S.C.
2235). Sections 50.33a, 50.55a and Appendix
Q also issued under sec. 102, Pub. L. 91–190,
83 Stat. 853 (42 U.S.C. 4332). Sections 50.34
and 50.54 also issued under sec. 204, 88 Stat.
1245 (42 U.S.C. 5844). Sections 50.58, 50.91,
and 50.92 also issued under Pub. L. 97–415,
96 Stat. 2073 (42 U.S.C. 2239). Section 50.78
also issued under sec. 122, 68 Stat. 939 (42
U.S.C. 2152). Sections 50.80–50.81 also
issued under sec. 184, 68 Stat. 954, as
amended (42 U.S.C. 2234). Appendix F also
issued under sec. 187, 68 Stat. 955 (42 U.S.C.
2237).
§ 50.41 [Amended]
4. In § 50.41, paragraph (c) is removed
and reserved.
5. Section 50.42 is revised to read as
follows:
§ 50.42 Additional standard for class 103
licenses.
In determining whether a class 103
license will be issued to an applicant,
the Commission will, in addition to
applying the standards set forth in
§ 50.40, consider whether the proposed
activities will serve a useful purpose
proportionate to the quantities of special
nuclear material or source material to be
utilized.
Dated at Rockville, Maryland, this 21st day
of July, 2008.
For the Nuclear Regulatory Commission.
R.W. Borchardt,
Executive Director for Operations.
[FR Doc. E8–17436 Filed 7–30–08; 8:45 am]
BILLING CODE 7590 –01–P
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 3
[Docket ID OCC–2008–0009]
FEDERAL RESERVE SYSTEM
12 CFR Parts 208 and 225
[Docket No. OP–1322]
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 325
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 567
[Docket No. 2008–0008]
Supervisory Guidance: Supervisory
Review Process of Capital Adequacy
(Pillar 2) Related to the Implementation
of the Basel II Advanced Capital
Framework
AGENCIES: Office of the Comptroller of
the Currency, Treasury (OCC); Board of
Governors of the Federal Reserve
System (Board); Federal Deposit
Insurance Corporation (FDIC); and
Office of Thrift Supervision, Treasury
(OTS) (collectively, the agencies).
ACTION: Final supervisory guidance.
SUMMARY: The agencies are publishing
guidance regarding the supervisory
review process for capital adequacy
(Pillar 2) provided in the Basel II
advanced approaches final rule, which
was published in the Federal Register
on December 7, 2007 (advanced
approaches final rule). The supervisory
review process described in this
guidance outlines the agencies’
standards for satisfying the qualification
requirements provided in the advanced
approaches final rule; addressing the
limitations of the minimum risk-based
capital requirements for credit risk and
operational risk; ensuring that each
institution has a rigorous process for
assessing its overall capital adequacy in
relation to its risk profile and a
comprehensive strategy for maintaining
appropriate capital levels; and
encouraging each institution to improve
its risk identification and measurement
techniques. This supervisory guidance
applies to any bank, savings association,
or bank holding company 1
implementing the advanced approaches
final rule.
DATES: This guidance is effective
September 2, 2008. Comments on the
Paperwork Reduction Act portion of this
document may be submitted on or
before September 2, 2008.
ADDRESSES: Comments on the
Paperwork Reduction Act portion of this
document should be addressed to:
OCC: Communications Division,
Office of the Comptroller of the
Currency, Public Information Room,
Mailstop 1–5, Attention: 1557–NEW,
250 E Street, SW., Washington, DC
20219. In addition, comments may be
sent by fax to (202) 874–4448, or by
electronic mail to
regs.comments@occ.treas.gov. You may
personally inspect and photocopy the
comments at the OCC’s Public
Information Room, 250 E Street, SW.,
Washington, DC 20219. For security
reasons, the OCC requires that visitors
make an appointment to inspect
comments. You may do so by calling
(202) 874–5043. Upon arrival, visitors
will be required to present valid
government-issued photo identification
and submit to security screening in
order to inspect and photocopy
comments.
Board: You may submit comments,
identified by OP–1322, by any of the
following methods:
• Agency Web Site: http://
www.federalreserve.gov. Follow the
instructions for submitting comments at
http://www.federalreserve.gov/.
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• Fax: (202) 452–3819 or (202) 452–
3102.
• Mail: Jennifer J. Johnson, Secretary,
Board of Governors of the Federal
Reserve System, 20th Street and
VerDate Aug<31>2005 15:05 Jul 30, 2008 Jkt 214001 PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 E:\FR\FM\31JYR1.SGM 31JYR1
yshivers on PROD1PC62 with RULES
44621Federal Register / Vol. 73, No. 148 / Thursday, July 31, 2008 / Rules and Regulations
2 71 FR 55830.
3 72 FR 69288. 4 72 FR 9084.
Constitution Avenue, NW., Washington,
DC 20551.
All public comments are available from
the Board’s Web site at http://
www.federalreserve.gov/generalinfo/
foia/ProposedRegs.cfm as submitted,
unless modified for technical reasons.
Accordingly, your comments will not be
edited to remove any identifying or
contact information. Public comments
may also be viewed electronically or in
paper form in Room MP–500 of the
Board’s Martin Building (20th and C
Streets, NW.) between 9 a.m. and 5 p.m.
on weekdays.
FDIC: You may submit comments by
any of the following methods:
• Agency Web Site: http://
www.fdic.gov/regulations/laws/federal.
Follow instructions for submitting
comments on the Agency Web Site.
• E-mail: Comments@FDIC.gov.
Include ‘‘Basel II Supervisory
Guidance’’ in the subject line of the
message.
• Mail: Robert E. Feldman, Executive
Secretary, Attention: Comments, Federal
Deposit Insurance Corporation, 550 17th
Street, NW., Washington, DC 20429.
• Hand Delivery/Courier: Guard
station at the rear of the 550 17th Street
Building (located on F Street) on
business days between 7 a.m. and 5 p.m.
(EST).
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• Public Inspection: All comments
received will be posted without change
to http://www.fdic.gov/regulations/laws/
federal including any personal
information provided. Comments may
be inspected and photocopied in the
FDIC Public Information Center, 3501
North Fairfax Drive, Room E–1002,
Arlington, VA 22226, between 9 a.m.
and 5 p.m. (EST) on business days.
Paper copies of public comments may
be ordered from the Public Information
Center by telephone at (877) 275–3342
or (703) 562–2200.
OTS: Information Collection
Comments, Chief Counsel’s Office,
Office of Thrift Supervision, 1700 G
Street, NW., Washington, DC 20552;
send a facsimile transmission to (202)
906–6518; or send an e-mail to
infocollection.comments@ots.treas.gov.
OTS will post comments and the related
index on the OTS Internet site at
http://www.ots.treas.gov. In addition,
interested persons may inspect the
comments at the Public Reading Room,
1700 G Street, NW., by appointment. To
make an appointment, call (202) 906–
5922, send an e-mail to
public.info@ots.treas.gov, or send a
facsimile transmission to (202) 906–
7755. A copy of the comments may also
be submitted to the OMB desk officer for
the Agencies: By mail to U.S. Office of
Management and Budget, 725 17th
Street, NW., Room 10235, Washington,
DC 20503 or by facsimile to 202–395–
6974, Attention: Federal Banking
Agency Desk Officer.
FOR FURTHER INFORMATION CONTACT:
OCC: Akhtarur Siddique, Lead Expert,
Risk Analysis, (202) 874–4665; or Ron
Shimabukuro, Senior Counsel,
Legislative and Regulatory Activities
Division, (202) 874–5090; Office of the
Comptroller of the Currency, 250 E
Street, SW., Washington, DC 20219.
Board: David Palmer, Senior
Supervisory Financial Analyst, Credit
Risk Section, (202) 452–2904 or Sabeth
Siddique, Assistant Director, Credit Risk
Section, (202) 452–3861; Board of
Governors of the Federal Reserve
System, 20th Street and Constitution
Avenue, NW., Washington, DC 20551.
For the hearing impaired only,
Telecommunication Device for the Deaf
(TDD), (202) 263–4869.
FDIC: Gloria Ikosi, Senior
Quantitative Risk Analyst, (202) 898–
3997, or Ryan Sheller, Capital Markets
Specialist, (202) 898–6614; Capital
Markets Policy Section, Division of
Supervision and Consumer Protection;
or Mark L. Handzlik, Senior Attorney,
(202) 898–3990, or Michael B. Phillips,
Counsel, (202) 898–3581, Supervision
Branch, Legal Division, Federal Deposit
Insurance Corporation, 550 17th Street,
NW., Washington, DC 20429.
OTS: Sonja White, Senior Project
Manager, (202) 906–7857, Capital
Policy, or Jonathan Jones, Senior
Financial Economist, (202) 906–5729,
Office of Thrift Supervision, 1700 G
Street, NW., Washington, DC 20552.
SUPPLEMENTARY INFORMATION: The
agencies issued a notice of proposed
rulemaking (NPR) on September 25,
2006,2 seeking comment on a new risk-
based capital adequacy framework that
requires some and permits other
qualifying banks to use an internal
ratings-based (IRB) approach to
calculate regulatory capital
requirements for credit risk and certain
advanced measurement approaches
(AMA) to calculate regulatory capital
requirements for operational risk
(together, the IRB and the AMA are
referred to as the ‘‘advanced
approaches’’). On December 7, 2007, the
agencies published the advanced
approaches final rule.3 The advanced
approaches final rule is based largely on
a series of publications by the Basel
Committee on Banking Supervision
(BCBS) that culminated in a
comprehensive release in June 2006,
titled, ‘‘International Convergence of
Capital Measurement and Capital
Standards: A Revised Framework’’ (New
Accord). The New Accord presents a
three-pillar framework for determining
risk-based capital requirements for
credit risk, market risk, and operational
risk (Pillar 1); supervisory review of
capital adequacy (Pillar 2); and market
discipline through enhanced public
disclosure (Pillar 3).
On February 28, 2007, the agencies
published in the Federal Register three
separate documents proposing
supervisory guidance related to the
implementation of the advanced
approaches.4 Two of those documents
provided guidance for certain aspects of
Pillar 1, that is, for the IRB systems for
determining the credit risk of retail and
wholesale exposures, and other systems
for equity and securitization exposures,
and for the AMA for determining
operational risk. The third document
proposed guidance for Pillar 2. This
final guidance document provides
supervisory guidance only for Pillar 2,
and it does not provide Pillar 1
guidance on the systems for determining
regulatory capital requirements for
credit risk or for determining regulatory
capital requirements for operational
risk. This document does not differ
significantly from the proposed Pillar 2
guidance.
The agencies recognize that a number
of institutions may need additional
guidance to implement the advanced
approaches final rule. Accordingly,
consistent with the proposed guidance
for Pillar 2, this guidance document
highlights certain aspects of existing
supervisory review that are being
augmented or clarified to support the
implementation of the supervisory
assessment of overall capital adequacy
under the advanced approaches final
rule. In making this assessment, the
agencies will consider, among other
items, whether each institution (i) has
satisfied the qualification requirements
for implementing the advanced
approaches; (ii) has a rigorous process
for assessing its overall capital adequacy
in relation to its risk profile and a
comprehensive strategy for maintaining
appropriate capital levels (internal
capital adequacy assessment process—
ICAAP); and (iii) maintains a
satisfactory risk management and
control structure, consistent with its
capital position and overall risk profile.
The agencies received ten public
comments on the proposed guidance
VerDate Aug<31>2005 15:05 Jul 30, 2008 Jkt 214001 PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 E:\FR\FM\31JYR1.SGM 31JYR1
yshivers on PROD1PC62 with RULES
2 71 FR 55830.
3 72 FR 69288. 4 72 FR 9084.
Constitution Avenue, NW., Washington,
DC 20551.
All public comments are available from
the Board’s Web site at http://
www.federalreserve.gov/generalinfo/
foia/ProposedRegs.cfm as submitted,
unless modified for technical reasons.
Accordingly, your comments will not be
edited to remove any identifying or
contact information. Public comments
may also be viewed electronically or in
paper form in Room MP–500 of the
Board’s Martin Building (20th and C
Streets, NW.) between 9 a.m. and 5 p.m.
on weekdays.
FDIC: You may submit comments by
any of the following methods:
• Agency Web Site: http://
www.fdic.gov/regulations/laws/federal.
Follow instructions for submitting
comments on the Agency Web Site.
• E-mail: Comments@FDIC.gov.
Include ‘‘Basel II Supervisory
Guidance’’ in the subject line of the
message.
• Mail: Robert E. Feldman, Executive
Secretary, Attention: Comments, Federal
Deposit Insurance Corporation, 550 17th
Street, NW., Washington, DC 20429.
• Hand Delivery/Courier: Guard
station at the rear of the 550 17th Street
Building (located on F Street) on
business days between 7 a.m. and 5 p.m.
(EST).
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• Public Inspection: All comments
received will be posted without change
to http://www.fdic.gov/regulations/laws/
federal including any personal
information provided. Comments may
be inspected and photocopied in the
FDIC Public Information Center, 3501
North Fairfax Drive, Room E–1002,
Arlington, VA 22226, between 9 a.m.
and 5 p.m. (EST) on business days.
Paper copies of public comments may
be ordered from the Public Information
Center by telephone at (877) 275–3342
or (703) 562–2200.
OTS: Information Collection
Comments, Chief Counsel’s Office,
Office of Thrift Supervision, 1700 G
Street, NW., Washington, DC 20552;
send a facsimile transmission to (202)
906–6518; or send an e-mail to
infocollection.comments@ots.treas.gov.
OTS will post comments and the related
index on the OTS Internet site at
http://www.ots.treas.gov. In addition,
interested persons may inspect the
comments at the Public Reading Room,
1700 G Street, NW., by appointment. To
make an appointment, call (202) 906–
5922, send an e-mail to
public.info@ots.treas.gov, or send a
facsimile transmission to (202) 906–
7755. A copy of the comments may also
be submitted to the OMB desk officer for
the Agencies: By mail to U.S. Office of
Management and Budget, 725 17th
Street, NW., Room 10235, Washington,
DC 20503 or by facsimile to 202–395–
6974, Attention: Federal Banking
Agency Desk Officer.
FOR FURTHER INFORMATION CONTACT:
OCC: Akhtarur Siddique, Lead Expert,
Risk Analysis, (202) 874–4665; or Ron
Shimabukuro, Senior Counsel,
Legislative and Regulatory Activities
Division, (202) 874–5090; Office of the
Comptroller of the Currency, 250 E
Street, SW., Washington, DC 20219.
Board: David Palmer, Senior
Supervisory Financial Analyst, Credit
Risk Section, (202) 452–2904 or Sabeth
Siddique, Assistant Director, Credit Risk
Section, (202) 452–3861; Board of
Governors of the Federal Reserve
System, 20th Street and Constitution
Avenue, NW., Washington, DC 20551.
For the hearing impaired only,
Telecommunication Device for the Deaf
(TDD), (202) 263–4869.
FDIC: Gloria Ikosi, Senior
Quantitative Risk Analyst, (202) 898–
3997, or Ryan Sheller, Capital Markets
Specialist, (202) 898–6614; Capital
Markets Policy Section, Division of
Supervision and Consumer Protection;
or Mark L. Handzlik, Senior Attorney,
(202) 898–3990, or Michael B. Phillips,
Counsel, (202) 898–3581, Supervision
Branch, Legal Division, Federal Deposit
Insurance Corporation, 550 17th Street,
NW., Washington, DC 20429.
OTS: Sonja White, Senior Project
Manager, (202) 906–7857, Capital
Policy, or Jonathan Jones, Senior
Financial Economist, (202) 906–5729,
Office of Thrift Supervision, 1700 G
Street, NW., Washington, DC 20552.
SUPPLEMENTARY INFORMATION: The
agencies issued a notice of proposed
rulemaking (NPR) on September 25,
2006,2 seeking comment on a new risk-
based capital adequacy framework that
requires some and permits other
qualifying banks to use an internal
ratings-based (IRB) approach to
calculate regulatory capital
requirements for credit risk and certain
advanced measurement approaches
(AMA) to calculate regulatory capital
requirements for operational risk
(together, the IRB and the AMA are
referred to as the ‘‘advanced
approaches’’). On December 7, 2007, the
agencies published the advanced
approaches final rule.3 The advanced
approaches final rule is based largely on
a series of publications by the Basel
Committee on Banking Supervision
(BCBS) that culminated in a
comprehensive release in June 2006,
titled, ‘‘International Convergence of
Capital Measurement and Capital
Standards: A Revised Framework’’ (New
Accord). The New Accord presents a
three-pillar framework for determining
risk-based capital requirements for
credit risk, market risk, and operational
risk (Pillar 1); supervisory review of
capital adequacy (Pillar 2); and market
discipline through enhanced public
disclosure (Pillar 3).
On February 28, 2007, the agencies
published in the Federal Register three
separate documents proposing
supervisory guidance related to the
implementation of the advanced
approaches.4 Two of those documents
provided guidance for certain aspects of
Pillar 1, that is, for the IRB systems for
determining the credit risk of retail and
wholesale exposures, and other systems
for equity and securitization exposures,
and for the AMA for determining
operational risk. The third document
proposed guidance for Pillar 2. This
final guidance document provides
supervisory guidance only for Pillar 2,
and it does not provide Pillar 1
guidance on the systems for determining
regulatory capital requirements for
credit risk or for determining regulatory
capital requirements for operational
risk. This document does not differ
significantly from the proposed Pillar 2
guidance.
The agencies recognize that a number
of institutions may need additional
guidance to implement the advanced
approaches final rule. Accordingly,
consistent with the proposed guidance
for Pillar 2, this guidance document
highlights certain aspects of existing
supervisory review that are being
augmented or clarified to support the
implementation of the supervisory
assessment of overall capital adequacy
under the advanced approaches final
rule. In making this assessment, the
agencies will consider, among other
items, whether each institution (i) has
satisfied the qualification requirements
for implementing the advanced
approaches; (ii) has a rigorous process
for assessing its overall capital adequacy
in relation to its risk profile and a
comprehensive strategy for maintaining
appropriate capital levels (internal
capital adequacy assessment process—
ICAAP); and (iii) maintains a
satisfactory risk management and
control structure, consistent with its
capital position and overall risk profile.
The agencies received ten public
comments on the proposed guidance
VerDate Aug<31>2005 15:05 Jul 30, 2008 Jkt 214001 PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 E:\FR\FM\31JYR1.SGM 31JYR1
yshivers on PROD1PC62 with RULES