June 25, 2012

Proposed Federal Banking Agency Regulations Implementing Basel III Standards Would Substantially Revise Capital Requirements

Arnold & Porter Advisory

On June 7, 2012, the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), and the Federal Deposit Insurance Corporation (FDIC) (collectively, the agencies) released three notices of proposed rulemaking and one joint final rule (the Market Risk Final Rule) that would revise and replace the agencies' current capital rules. The proposed rules and the joint final rule would update the agencies' general risk-based and leverage capital requirements to incorporate agreements reached by the Basel Committee on Banking Supervision (BCBS) in "Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems" and certain other revisions to the Basel capital framework in response to the global financial crisis. They would also implement Section 171 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which calls for new leverage and risk-based capital requirements.


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