Publication of documents related to implementation of the Basel Capital Accord.

The four federal bank and thrift regulatory agencies announced on August 4, 2003, the publication of joint Federal Register notices and requests for comment on two interagency documents related to the proposed implementation of the new Basel Capital Accord in the United States.

Earlier this month, the agencies approved issuance of the two documents for public comment.

The new accord, which is being developed by the Basel Committee on Banking Supervision, builds on and, for certain banks, would replace the Basel Capital Accord of 1988, which is the framework for capital adequacy standards for large, internationally active banks and the basis for the risk-based capital adequacy standards now in place for all U.S. banks and bank holding companies.

The first document, an advance notice of proposed rulemaking, sets forth for public comment the agencies' current views on a proposed framework for implementing the revised capital accord in the United States. Under the proposal, internationally active banks meeting certain criteria would be subject to the advanced internal ratings-based approach for credit risk and the advanced measurement approaches for operational risk.

The second document contains two sections. The first section sets forth draft supervisory guidance on internal ratings-based systems for corporate credits, and the second describes draft supervisory expectations for operational risk management.

Comments on the two documents will be accepted by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision through November 3, 2003.