EB 92-4
BANKING ISSUANCES
Comptroller of the Currency
Administrator of National Banks
Type:  Examining Bulletin
Subject:  Risk-Based Capital Guidance
TO: Department and Division Heads and All Examining Personnel

PURPOSE: This bulletin transmits guidance on risk management and other
factors affecting bank capital adequacy. Also attached is a matrix and
instructions to help examiners determine any additional capital
requirement to include when recommending an enforcement action. The
attached guidance and matrix were developed in response to examiners'
requests.

BACKGROUND: This is an interim step for use while interagency work toward
consistent procedures required by the Federal Deposit Insurance
Corporation Improvement Act (FDICIA) is under way. That effort is likely
to result in new, uniform interagency capital adequacy guidelines in early
1993.

CONTENTS: Three documents are attached to this bulletin:

1. Examiner Guidance -- This document discusses the factors an examiner
should evaluate in determining a bank's capital adequacy. It also helps
examiners using the matrix by providing tests examiners can apply to
determine how to score risk management (circumstances 4a., b., c., and d
of the matrix).

2. Risk-Based Capital Matrix Instructions -- This document provides
specific information on scoring the elements of the capital matrix. It
explains when to score different circumstances and conditions to consider
for each.

3. Risk-Based Capital Matrix -- This document is a scoring tool to develop
a possible ratio of tier 1 capital to risk-based assets to include in a
proposed enforcement action. It lists different circumstances examiners
should score and offers suggested scoring for them. Examiners may use
their judgment to deviate from the matrix scores, but must document the
basis for their decisions.


RESPONSIBLE OFFICE: Any questions about the guidance or the use of the
matrix should be addressed to the Chief National Bank Examiner's Office,
(202) 874-5170 or the Special Supervision Division (202) 874-4450.


 

Donald G. Coonley
Chief National Bank Examiner


Attachments

Date:  June 29, 1992