Regulatory Capital Rules: Regulatory Capital, Enhanced Supplementary Leverage Ratio Standards for Certain Bank Holding Companies and their Subsidiary Insured Depository Institutions

Highlights: 
The interim final rule: 

• The proposed rule would increase the 3 percent supplementary leverage ratio requirement contained in the interim final rule titled “Regulatory Capital Rules: Regulatory Capital, Implementation of Basel III, Capital Adequacy, Transition Provisions, Prompt Corrective Action; Standardized Approach for Risk-Weighted Assets; Market Discipline and Disclosure Requirements; Advanced Approaches Risk-Based Capital Rule; and Market Risk Capital Rule.”
• The new requirements would apply to the largest, most interconnected banking organizations with at least $700 billion in total consolidated assets at the top-tier BHC or at least $10 trillion in assets under custody (covered BHCs) and any insured depository institution subsidiary of these BHCs (covered IDIs).
• For covered IDIs, the proposed rule would establish a supplementary leverage ratio of 6 percent as a “well-capitalized” threshold for prompt corrective action.
• For covered BHCs, the proposed rule establishes a capital conservation buffer composed of tier 1 capital of 2 percent of total leverage exposure; therefore, these BHCs would need to maintain a supplementary leverage ratio of 5 percent to avoid restrictions on capital distributions.
• The denominator in the proposed rule would be consistent with total leverage exposure in the FDIC’s interim final rule on Basel III
• The federal banking agencies are seeking comment on the proposed calibration, including whether the increase in leverage requirements would appropriately complement the increases in the risk-based capital requirements in the final rule, and whether and how risk-based capital requirements could be simplified.

Distribution: 
FDIC-Supervised Banks and Savings Associations 

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

Note: 
FDIC Financial Institution Letters (FILs) may be accessed from the FDIC's Web site at http://www.fdic.gov/news/financial-institution-letters/2013/index.html. 

To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html. 

Paper copies may be obtained via the FDIC's Public Information Center, 3501 Fairfax Drive, E 1002, Arlington, VA 22226 (1-877-275-3342 or 703-562-2200).