Agencies Seek Public Comment on Basel II and Market Risk Proposed Rulemakings
The federal bank and thrift regulatory agencies announced today
that they will request public comment on a notice of proposed rulemaking (NPR) that
would implement new risk-based capital requirements in the United States for large,
internationally active banking organizations.
The NPR details the agencies plans for implementing the Basel Committee
on Banking Supervisions (BCBS) new capital accord (Basel II) that was issued
in 2004. The agencies also will request
comment on proposed Basel II supervisory reporting templates.
The Federal Reserve Board (Board), the Federal Deposit
Insurance Corporation (FDIC), the Office of the Comptroller of the Currency
(OCC) and the Office of Thrift Supervision (OTS) first adopted risk-based
capital standards in 1989. Those
standards were based on the Basel Capital Accord that the BCBS originally
issued in 1988 (Basel
I). For banking organizations that meet
qualifying criteria, the Basel II NPR would replace U.S.
rules implementing Basel
I. The proposed framework would be
mandatory for large, internationally active banking organizations and optional
for others.
In March of this year, the Board released a preliminary
draft of the Basel II NPR. The version being
made available today differs in some respects from the March draft. For example, the agencies have responded to
certain requests from the industry to seek comment on alternative risk-based
capital approaches and have clarified that in evaluating credit risk, banking
organizations should not rely on the possibility of U.S. government financial
assistance, except for the financial assistance that the government has legally
committed to provide. The final document, which will be published in the
Federal Register shortly, should be used as the basis for comments.
Separately, the agencies announced that they will request comment
on proposed revisions to the market risk capital rules that the OCC, Board, and
FDIC have used since 1997 for banking organizations with significant exposure
to market risk. Under the market risk
capital rule, certain banking organizations are required to calculate a capital
requirement for the general market risk of their covered positions and the
specific risk of their covered debt and equity positions. The proposed revisions would enhance the rules
risk sensitivity and would require public disclosures of certain qualitative
and quantitative market risk information.
The notice of proposed rulemaking on the market risk capital
rule would implement changes the BCBS approved in 2005 and also would apply to certain
savings associations, which currently are not covered under the rule. The agencies will also seek comment on proposed
supervisory reporting templates related to the market risk capital rule.
The Board, FDIC, OCC and OTS request comments on the
proposals within 120 days of publication in the Federal Register. The proposals are attached.
The agencies remain committed to issuing in the near future
additional proposed revisions to their existing risk-based capital rules, known
as Basel IA, in
a timeframe that will allow for overlapping comment periods for both the Basel
II NPR and the NPR for the proposed Basel
IA revisions.
Related Links:
·
Statement from the Comptroller PDF, Risk-Based Capital Standards:
Market Risk PDF and Template PDF, Risk-Based Capital Standards: Advanced Capital Adequacy Framework
PDF and Template PDF.
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Media Contacts:
Federal Reserve Susan
Stawick 202-452-2955
FDIC David
Barr 202-898-6992
OCC Kevin Mukri 202-874-5770