BASEL COMMITTEE PROPOSAL TO AMEND CAPITAL ADEQUACY FRAMEWORK: REQUEST FOR COMMENTS AND RELEASE OF AN INTERAGENCY SUMMARY.

The federal bank regulatory agencies will accept public comments on a major proposal by the Basel Committee on Banking Supervision to amend the 1988 international capital adequacy framework. The full document is available on the web site of the Bank for International Settlements at www.bis.org. Comments are requested on the proposal by May 31, 2001, and may be sent to the U.S. banking agencies and to the Basel Committee.

Although the 1988 Capital Accord was applied to all banks in the United States, it has not been determined how broadly the new approach will be applied, particularly given the many complex elements that may not be needed for smaller, less complex institutions. The U.S. banking agencies recently issued an advance notice of proposed rulemaking for noncomplex institutions ("Simplified Capital Framework for Non-Complex Institutions," published November 3, 2000). Comments received on that proposal (due by February 1, 2001) will be considered in determining whether to apply the new approach to all banks.

The Federal Reserve Board on January 23, 2001, released an interagency summary of the Basel Committee on Banking Supervision's consultative proposal issued to the public on January 16, 2001. Attached to the summary is a set of discussion issues. Respondents to the Basel Committee proposal are encouraged to review and provide comments on the entire range of topics covered in the proposal and to take particular notice of the issues highlighted in the U.S. agencies' release. The summary and questions are available on the web sites of the Office of the Comptroller of the Currency (www.occ. treas.gov), the Federal Reserve Board of Governors (www.federalreserve.gov), and the Federal Deposit Insurance Corporation (www.fdic.gov).