Federal Deposit Insurance Corporation
550 17th Street NW, Washington, DC 20429-9990
Financial Institution Letter
FIL-88-2010
December 16, 2010
Risk-Based Capital Standards
Proposed Rule on Advanced Capital Adequacy Framework—Basel
II; Establishment of a Risk-Based Capital Floor
Summary: The federal bank regulatory agencies have jointly issued the attached notice of proposed rulemaking to
amend the advanced risk-based capital adequacy standards (advanced approaches rules) to be consistent with certain
provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act), and to amend the general
risk-based capital rules to provide limited flexibility consistent with section 171(b) of the Act for recognizing the relative
risk of certain assets generally not held by depository institutions.
Distribution:
FDIC-Supervised Banks (Commercial and Savings)
Suggested Routing:
Chief Executive Officer
Chief Financial Officer
Chief Risk Officer
Related Topics:
Risk-Based Capital Rules
12 CFR Part 325
Basel II
Attachment:
Joint Notice of Proposed Rulemaking, Risk-Based
Capital Standards: Advanced Capital Adequacy
Framework—Basel II; Establishment of a Risk-Based
Capital Floor - PDF (PDF Help)
Contact:
George French, Deputy Director
at gfrench@fdic.gov or (202) 898-3929
Nancy Hunt, Associate Director at nhunt@fdic.gov or
(202) 898-6643
Note:
FDIC financial institution letters (FILs) may be
accessed from the FDIC's Web site
at www.fdic.gov/news/news/financial/2010/index.html.
To receive FILs electronically, please
visit http://www.fdic.gov/about/subscriptions/fil.html.
Paper copies of FDIC financial institution letters may
be obtained through the FDIC's Public Information
Center, 3501 Fairfax Drive, E-1002, Arlington, VA
22226 (1-877-275-3342 or 703-562-2200).
Highlights:
The proposed rule:
• Applies to all banks that use the advanced approaches
rules to calculate their risk-based capital requirements.
• Consistent with Section 171 of the Act, replaces the
"transitional floors" in the advanced approaches rules with
a permanent floor equal to the minimum capital
requirement computed using the agencies' general risk-
based capital rules.
• Amends the agencies' general risk-based capital rules to
allow banks to use the Bank Holding Company capital
rules in limited circumstances to determine the capital
requirements for low-risk assets not typically held by
banks.
• Requests comment on how the proposed rule should be
applied to foreign banks in evaluating their capital
equivalency in the context of applications to establish
branches or make bank or nonbank acquisitions in the
United States, and in evaluating capital comparability in
the context of foreign bank financial holding company
declarations.
The deadline for comments is 60 days from the date of
publication in The Federal Register.Inactive
550 17th Street NW, Washington, DC 20429-9990
Financial Institution Letter
FIL-88-2010
December 16, 2010
Risk-Based Capital Standards
Proposed Rule on Advanced Capital Adequacy Framework—Basel
II; Establishment of a Risk-Based Capital Floor
Summary: The federal bank regulatory agencies have jointly issued the attached notice of proposed rulemaking to
amend the advanced risk-based capital adequacy standards (advanced approaches rules) to be consistent with certain
provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act), and to amend the general
risk-based capital rules to provide limited flexibility consistent with section 171(b) of the Act for recognizing the relative
risk of certain assets generally not held by depository institutions.
Distribution:
FDIC-Supervised Banks (Commercial and Savings)
Suggested Routing:
Chief Executive Officer
Chief Financial Officer
Chief Risk Officer
Related Topics:
Risk-Based Capital Rules
12 CFR Part 325
Basel II
Attachment:
Joint Notice of Proposed Rulemaking, Risk-Based
Capital Standards: Advanced Capital Adequacy
Framework—Basel II; Establishment of a Risk-Based
Capital Floor - PDF (PDF Help)
Contact:
George French, Deputy Director
at gfrench@fdic.gov or (202) 898-3929
Nancy Hunt, Associate Director at nhunt@fdic.gov or
(202) 898-6643
Note:
FDIC financial institution letters (FILs) may be
accessed from the FDIC's Web site
at www.fdic.gov/news/news/financial/2010/index.html.
To receive FILs electronically, please
visit http://www.fdic.gov/about/subscriptions/fil.html.
Paper copies of FDIC financial institution letters may
be obtained through the FDIC's Public Information
Center, 3501 Fairfax Drive, E-1002, Arlington, VA
22226 (1-877-275-3342 or 703-562-2200).
Highlights:
The proposed rule:
• Applies to all banks that use the advanced approaches
rules to calculate their risk-based capital requirements.
• Consistent with Section 171 of the Act, replaces the
"transitional floors" in the advanced approaches rules with
a permanent floor equal to the minimum capital
requirement computed using the agencies' general risk-
based capital rules.
• Amends the agencies' general risk-based capital rules to
allow banks to use the Bank Holding Company capital
rules in limited circumstances to determine the capital
requirements for low-risk assets not typically held by
banks.
• Requests comment on how the proposed rule should be
applied to foreign banks in evaluating their capital
equivalency in the context of applications to establish
branches or make bank or nonbank acquisitions in the
United States, and in evaluating capital comparability in
the context of foreign bank financial holding company
declarations.
The deadline for comments is 60 days from the date of
publication in The Federal Register.Inactive