Joint Report: Differences in Accounting and Capital Standards Among the Federal Banking Agencies as of December 31, 2013; Report to Congressional…
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Joint Report: Differences in Accounting and Capital Standards Among the Federal Banking Agencies as of
SUMMARY: The OCC, the Board, and the
FOR FURTHER INFORMATION CONTACT: OCC:
Board:
SUPPLEMENTARY INFORMATION: The text of the report follows:
Report to the Committee on
Introduction
FOOTNOTE 1 Prior to 2011, the
The agencies are submitting this joint report, which covers differences between their uses of accounting or capital standards existing as of
FOOTNOTE 2 See, e.g., 77 FR 75259 (
Since the agencies filed their first reports on accounting and capital differences in 1990, they have acted in concert to harmonize their accounting and capital standards and eliminate as many differences as possible. Section 303 of the
FOOTNOTE 3 12 U.S.C. 4803(a). END FOOTNOTE
Several of the differences described in this report will be resolved beginning in 2014, when revised capital rules take effect for institutions subject to the advanced approaches risk-based capital rules, and in 2015, when revised capital rules take effect for all other institutions subject to those rules. In 2012, the agencies published three notices of proposed rulemaking seeking public comment on the implementation of the Basel III capital standards, /4/ a standardized approach for risk weighting assets and off-balance sheet exposures, as well as revisions to the agencies' advanced approaches rules. /5/ The agencies adopted these proposals with some revisions and published the revised capital rules in the
FOOTNOTE 4 See BCBS, "Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems" (
FOOTNOTE 5 See 77 FR 52792 (
FOOTNOTE 6 The Board adopted the revised capital rules as final on
In 2012, the agencies also revised their market risk capital rules in a uniform manner to better capture positions subject to market risk, reduce pro-cyclicality in market risk capital requirements, enhance sensitivity to market risks, and increase transparency through enhanced disclosures. /7/ In the revised capital rules, the agencies also expanded the scope of the market risk capital rules to include savings associations and incorporated the market risk rules into the revised regulatory capital framework. /8/
FOOTNOTE 7 See 77 FR 53060 (
FOOTNOTE 8 See 78 FR 62018 (
In addition to the specific differences in capital standards noted below, the agencies may have differences in how they apply certain aspects of their rules. These differences usually arise as a result of case-specific inquiries that have been presented to only one agency. Agency staffs seek to minimize these occurrences by coordinating responses to the fullest extent reasonably practicable. Furthermore, while the agencies work together to adopt and apply generally uniform capital standards, there are wording differences in various provisions of the agencies' standards that largely date back to each agency's separate initial adoption of these standards prior to 1990.
In general, however, the agencies have substantially similar capital adequacy standards. /9/ These standards are based on a common regulatory framework that establishes minimum leverage and risk-based capital ratios for depository institutions (banks and savings associations). /10/ The agencies view the leverage and risk-based capital requirements as minimum standards, and most institutions generally are expected to operate with capital levels well above the minimums, particularly those institutions that are expanding or experiencing unusual or high levels of risk.
FOOTNOTE 9 The agencies' general risk-based capital rules are at 12 CFR part 3 (national banks) and 12 CFR part 167.6 (federal savings associations); 12 CFR parts 208 and 225, appendix A (state member banks and bank holding companies, respectively); 12 CFR part 325, appendix A (state nonmember banks); and 12 CFR part 390, subpart Z (state savings associations). END FOOTNOTE
FOOTNOTE 10 12 U.S.C. 1813(c). END FOOTNOTE
The agencies note that, with respect to the advanced approaches rules, /11/ there are virtually no differences across the agencies' rules because the agencies adopted a joint rule establishing a common advanced approaches framework in
FOOTNOTE 11 Prior to issuance of the revised capital rules, the agencies' advanced approaches rules were at 12 CFR part 3, appendix C (national banks) and 12 CFR part 167, appendix C (federal savings associations); 12 CFR part 208, appendix F, and 12 CFR part 225, appendix G (state member banks and bank holding companies, respectively); 12 CFR part 325, appendix D (state nonmember banks); and 12 CFR part 390, subpart Z, appendix A (state savings associations). END FOOTNOTE
FOOTNOTE 12 See 72 FR 69288 (
--This is a summary of a
Report to the Congressional Committees.
Citation: "79 FR 56856"
Federal Register Page Number: "56856"
"Notices"
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