Printer Friendly
The Free Library
14,694,555 articles and books
Member login
User name  
Password 
 
Join us Forgot password?

INTERAGENCY PROPOSAL TO SIMPLIFY CAPITAL REQUIREMENTS FOR NON-COMPLEX BANKS AND THRIFT INSTITUTIONS.


The federal bank and thrift regulatory agencies requested on November 3, 2000, public comment on an advance notice of proposed rulemaking A notice of proposed rulemaking or NPRM is issued by law when a regulatory agency of the United States Federal Government wishes to add, remove, or change a rule (or regulation) as part of the rulemaking process.

Outside the USA.
 that considers the establishment of a simplified regulatory capital framework for non-complex institutions. The advance notice was published in the Federal Register (November 3, 2000).

Comments are due February 1, 2001, to the Office of the Comptroller of the Currency The Office of the Comptroller of the Currency (or OCC) was established by the National Currency Act of 1863 and serves to charter, regulate, and supervise all national banks and the federal branches and agencies of foreign banks in the United States. , the Board of Governors of the Federal Reserve System Board of Governors of the Federal Reserve System

The managing body of the Federal Reserve System, which sets policies on bank practices and the money supply.
, the Federal Deposit Insurance Corporation Federal Deposit Insurance Corporation (FDIC), an independent U.S. federal executive agency designed to promote public confidence in banks and to provide insurance coverage for bank deposits up to $100,000. , or the Office of Thrift Supervision The Office of Thrift Supervision (OTS) was established as a bureau of the Treasury Department in August 1989 as part of a major Reorganization Plan of the thrift regulatory structure mandated by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) (12 U.S.C.A. .

Banks and thrift institutions are required to maintain minimum levels of capital set by U.S. regulators under a framework established by the Basel Accord Basel Accord

Agreement concluded among country representatives in 1988 in Switzerland to develop standardized risk-based capital requirements for banks across countries.
 in 1988. The U.S. and other regulators are currently revising the Accord to provide a more refined assessment of the capital requirements Capital requirements

Financing required for the operation of a business, composed of long-term and working capital plus fixed assets.
 for large, complex, internationally active banks. The agencies seek comment on simplified capital frameworks for noncomplex banks and thrift institutions that would conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?"
fit, meet

coordinate - be co-ordinated; "These activities coordinate well"
 the underlying principles of a revised Basel Accord and maintain the principles of prudential supervision, yet would relieve unnecessary regulatory burden.

The advance notice by the agencies observes that a large number of community banks and thrift institutions might benefit from a simpler capital framework that relieves some of the regulatory burden associated with regulatory capital calculations. The agencies suggest criteria that could be used to determine eligibility for a simplified capital framework, such as the nature of a bank's activities, its asset size, and its risk profile. In the advance notice, the agencies seek comment on possible minimum regulatory capital requirements for non-complex institutions, including a simplified risk-based ratio, a simple leverage ratio, or a leverage ratio modified to incorporate certain off-balance-sheet exposures.

The advance notice solicits public comment on the agencies' preliminary views, particularly on the following issues:

* Defining a non-complex institution

* Identifying the factors for determining eligibility for a simplified capital framework

* Setting an appropriate minimum capital threshold for non-complex institutions that maintains prudent capital levels and minimizes the regulatory burden associated with calculating that level

* Considering additional options for measuring regulatory capital at non-complex institutions

* Resolving the implementation issues associated with a simplified capital framework.
COPYRIGHT 2000 Board of Governors of the Federal Reserve System
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2000, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

 Reader Opinion

Title:

Comment:



 

Article Details
Printer friendly Cite/link Email Feedback
Publication:Federal Reserve Bulletin
Article Type:Brief Article
Geographic Code:1USA
Date:Dec 1, 2000
Words:352
Previous Article:INCREASE IN ADVERSELY CLASSIFIED SYNDICATED LOANS.(Brief Article)(Statistical Data Included)
Next Article:INTERAGENCY PROPOSAL TO LIMIT SHARING OF CONSUMER DATA AMONG FINANCIAL AFFILIATES.(Brief Article)
Topics:



Related Articles
BASEL COMMITTEE PROPOSAL TO AMEND CAPITAL ADEQUACY FRAMEWORK: REQUEST FOR COMMENTS AND RELEASE OF AN INTERAGENCY SUMMARY.(Brief Article)
PROPOSED ACTION.(Brief Article)
JOINT PROPOSAL FOR REVISION OF THE RISK-BASED CAPITAL RULES.(Brief Article)
ORDERS ISSUED UNDER BANK HOLDING COMPANY ACT.
Interagency guidance on compliance with consumer privacy regulations. (Announcements).(Brief Article)
Orders issued under Bank Holding Company Act. (Legal Developments).
Agencies issue advance notice of proposed rulemaking for the New Basel Capital Accord.(Announcements)
Publication of documents related to implementation of the Basel Capital Accord.(Announcements)(Brief Article)
Publication of Revised Capital Framework and U.S. implementation plans.(Announcements)
Final rules regarding disposal of consumer information.(Fair and Accurate Credit Transactions Act of 2003, Federal Reserve Board)(Brief Article)

Terms of use | Copyright © 2009 Farlex, Inc. | Feedback | For webmasters | Submit articles