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OCC PROPOSES TO AMEND ITS RISK-BASED CAPITAL GUIDELINES

 WASHINGTON, Aug. 18 /PRNewswire/ -- Capital requirements for loans backed by cash or near-cash collateral would decline under a rule to be proposed by the Office of the Comptroller of the Currency (OCC). The proposal has been sent to the Federal Register, the OCC said today.
 The proposed rule would amend risk-based capital guidelines for national banks. Under the proposal, the risk weight for transactions collateralized with cash or near-cash assets would drop from 20 percent to 0 percent.
 The change would apply to securities lending and repurchase agreement transactions and certain collateralized letters of credit. The OCC said these transactions pose virtually no credit risk and only minimal operational risk, defined as risk of loss because of failure to process a transaction properly.
 In order to qualify for the 0 percent risk weight, certain conditions related to collateral would have to be met. The conditions would ensure that the value of the collateral in these transactions equals or exceeds the value of the bank's exposure.
 The OCC also requests comment on whether other types of collateralized transactions should qualify for the 0 percent risk weight. In particular, the OCC seeks public comment on a 0 percent risk-weight for collateralized swap agreements and certain collateralized letters of credit.
 The public comment period for the proposed rule is 30 days after publication in the Federal Register.
 -0- 8/18/93
 /CONTACT: Frank Vance Jr. of the Office of the Comptroller of the Currency, 202-874-4700/


CO: Office of the Comptroller of the Currency ST: District of Columbia IN: FIN SU: EXE

DC-IH -- DC017 -- 3975 08/18/93 14:26 EDT
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Publication:PR Newswire
Date:Aug 18, 1993
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