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Highlights:
The attached final rule:
- Applies to banking organizations that (1) have consolidated assets equal to $250 billion or
more, (2) have consolidated total on-balance sheet foreign exposures of $10 billion or more, (3)
elect to use the rule, or (4) are subsidiaries of a bank or bank holding company that uses the
rule.
- Provides that a banking organization may be exempt from applying the final rule if its primary
federal supervisor determines that the application of the final rule is not appropriate in light
of the banking organization's asset size, level of complexity, risk profile, or scope of
operations.
- Applies to the determination of risk-based capital requirements for wholesale, retail, equity
and securitization exposures. The rule also requires a bank to determine risk-based capital
requirements for operational risk.
- Includes prudential safeguards to maintain sufficient capital in the banking system such as (1)
providing that no bank can exit the third transitional floor period until the agencies publish a
study finding no material deficiencies with the advanced approaches that cannot be addressed by
existing tools, (2) maintaining the transitional floor period of at least three years, and (3)
retaining the leverage ratio and prompt corrective action standards.
Distribution:
FDIC-Supervised Banks (Commercial and Savings)
Suggested Routing:
Chief Executive Officer
Chief Financial Officer
Chief Risk Officer
Related Topics:
Basel II
Risk-Based Capital Rules
12 CFR Part 325
Attachments:
Key Aspects of the Final Rule on Risk-Based
Capital Standards: Advanced Capital Adequacy Framework – Basel II - PDF (PDF Help)
Final Rule on Risk-Based Capital
Standards: Advanced Capital Adequacy Framework – Basel II - PDF 1125k (PDF Help)
Contacts:
Jason C. Cave, Associate Director, Capital Markets
Branch, at jcave@fdic.gov or (202) 898-3548,
Bobby R. Bean, Chief, Capital Markets Policy
Section, at bbean@fdic.gov or (202) 898-3575
Note:
FDIC financial institution letters (FILs) may be
accessed from the FDIC's Web site at
www.fdic.gov/news/news/financial/2007/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, Room E
1002, Arlington, VA 22226 (1-877-275-3342 or
703-562-2200).
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