Final Rule Amending Risk-Based Capital
Requirements to Incorporate Market Risk (Part 325 of
the FDIC's Rules and Regulations)
The FDIC, the Office of the Comptroller of the Currency
and the Federal Reserve Board have amended their respective
risk-based capital requirements to incorporate a measure
for market risk to cover debt and equity positions located
in an institution's trading account and foreign exchange
and commodity positions wherever located.
The effect of the final rule is that any bank or bank
holding company regulated by the agencies with significant
exposure to market risk must measure that risk using its
own internal value-at-risk model, subject to the parameters
contained in the rule, and hold a commensurate amount of
The agencies anticipate that approximately 15 of the largest
U. S. institutions and a few small institutions will be
affected by this rule. Compliance with the rule is not required
until January 1, 1998. Subject to supervisory approval,
voluntary compliance may begin January 1, 1997. A copy of
the Federal Register notice of the amendments is attached.
For more information, please contact one of the FDIC officials
listed on Page 47358 of the attached Federal Register notice.
Nicholas J. Ketcha Jr.
Distribution: FDIC-Supervised Banks (Commercial and Savings)
Note: Paper copies of FDIC financial institution letters
may be obtained through the FDIC's Public Information Center,
801 17th Street, N.W., Room 100, Washington, D.C. 20434