Highlights:
In the attached NPR, the agencies:

• Propose to apply the rule to banking organizations that (i) have consolidated assets equal to $250 billion or more; (ii) have consolidated total on-balance sheet foreign exposures of $10 billion or more; (iii) elect to use the proposed rule; or (iv) are subsidiaries of a bank or bank holding company that uses the proposed rule.
• Propose to apply this rule to determine risk-based capital requirements for wholesale, retail, equity and securitization exposures. This rule would also require a bank to determine risk-based capital requirements for operational risk.
• Seek industry and public comment on various aspects of the proposed implementation, including whether to allow core banks to use simpler approaches to calculate their risk-based capital.
• Include various prudential safeguards to maintain sufficient capital in the banking system such as: (i) placing a 10 percent downward limit on aggregate reductions in minimum risk-based capital requirements; (ii) extending the transitional floor period to a minimum of three years; and (iii) 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:
Risk-Based Capital Rules 12 CFR Part 325 Basel II

Attachments:

• "Key Aspects of the Proposed Rule on Risk- Based Capital Standards Advanced Capital Adequacy Framework"
  "Key Aspects of the Proposed Rule on Risk- Based Capital Standards Advanced Capital Adequacy Framework" - PDF 132k (PDF Help)
• Notice of Proposed Rulemaking, Risk-Based Capital Standards: Advanced Capital Adequacy Framework - PDF 997k (PDF Help)

Contact:
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

Printable Format:
FIL-86-2006 - PDF 38k (PDF Help)

Note:
FDIC financial institution letters (FILs) may be accessed from the FDIC's Web site at www.fdic.gov/news/news/financial/2006/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).