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Financial Institution Letters

Regulatory Capital Standards
Final Rule Amending the Risk-Based Capital Rules to Reflect the Issuance of FAS 166 and FAS 167
FIL-3-2010
January 21, 2010


Summary: The attached final rule amends the federal banking and thrift regulatory agencies' general risk-based and advanced risk-based capital adequacy frameworks in recognition of the regulatory capital impact of two recently-issued accounting standards from the Financial Accounting Standard Board (FASB)

Highlights:

The final rule:

  • Provides for an optional two-quarter implementation delay, followed by an optional two-quarter partial implementation, of the effect on risk-weighted assets that will result from changes to U.S. generally accepted accounting principles from FAS 166 and FAS 167.
  • Provides for an optional two-quarter delay, followed by an optional two-quarter phase-in, of the application of the agencies' regulatory limit on the inclusion of the allowance for loan and lease losses (ALLL) in Tier 2 capital for the portion of the ALLL associated with the assets a banking organization consolidates as a result of FAS 167.
  • Eliminates the exclusion of certain consolidated asset-backed commercial paper programs from risk-weighted assets.
  • Provides a reservation of authority to permit the agencies to require banking organizations to treat entities that are not consolidated under accounting standards as if they were consolidated for risk-based capital purposes, commensurate with the risk relationship of the banking organization to the structure.

Distribution:
FDIC-Supervised Banks (Commercial and Savings)

Suggested Routing:
Chief Executive Officer
Chief Financial Officer
Chief Risk Officer

Related Topics:
Risk-Based Capital Rules
12 CFR Part 325

Attachment:
Summary of Final Rule - PDF (PDF Help)
Final Rule - PDF (PDF Help)

Contact:
James Weinberger, Senior Policy Analyst, at jweinberger@fdic.gov or (202) 898-7034
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-3-2010 - 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/2010/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).


Last Updated 1/21/2010 communications@fdic.gov