Highlights:
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The Attorney General of the State of California has opined that the registered warrants that the State is issuing as a form of payment for certain of its obligations are valid and binding obligations of the State.
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The banking agencies' risk-based capital standards permit a banking organization to risk weight general obligation claims on a state at 20 percent. These warrants, which are general obligations of the State, would, therefore, be eligible for the 20 percent risk weight for risk-based capital purposes.
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Banks should exercise the same prudent judgment and sound risk management practices with respect to the registered warrants as they would with any other obligation of a state.
Distribution:
FDIC-Supervised Banks (Commercial and Savings)
Suggested Routing:
Chief Executive Officer
Chief Financial Officer
Chief Accounting Officer
Related Topics:
Risk-Based Capital Standards
12 CFR Part 325
Attachment:
Interagency Statement on California Registered Warrants
Contact:
Nancy Hunt, Acting Associate Director, at nhunt@fdic.gov or (202) 898-6643
Robert Storch, Chief Accountant, at rstorch@fdic.gov or (202) 898-8906
Mark Handzlik, Senior Attorney, at mhandzlik@fdic.gov or (202) 898-3990
Printable Format:
FIL-41-2009 - PDF (PDF Help)
Note:
FDIC financial institution letters (FILs) may be accessed from the FDIC's Web site at www.fdic.gov/news/news/financial/2009/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).
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