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Home Archive for category "Basel III – US" (Page 7)
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Advanced Approaches Capital Rules: Federal Reserve Issues Guidance for Independent Verification of a Banking Organization’s Advanced Approaches Systems

The Federal Reserve’s Basel Coordination Committee has issued guidance to advanced approaches banking organizations regarding the governance and the control environment for their advanced approaches systems.   The guidance provides that the governance and control environment should incorporate independent verification and promote the accuracy of inputs to risk-based capital calculations and the banking organization’s overall safe and sound operations.

Background:  The advanced approaches capital rules, originally adopted by the U.S. banking agencies in 2007, apply to the largest and most internationally active U.S.…  Read More

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Advanced Approaches Capital Rules: Federal Reserve Issues Guidance for Excluding Certain Exposures to Investment Firms from the Definition of “Traditional Securitization”

The Federal Reserve’s Basel Coordination Committee has issued guidance to advanced approaches banking organizations with respect to excluding certain exposures to investment firms from the definition of “traditional securitization” in the advanced approaches capital rules.  This blog post focuses on the exclusion for investment firms that exercise unfettered control over their underlying exposures.

Background:  The advanced approaches capital rules, originally adopted by the U.S. banking agencies in 2007, apply to the largest and most internationally active U.S. banking organizations (advanced approaches banking organizations) and implement the Basel capital framework’s internal ratings-based approach for calculating risk-weighted assets for credit risk and advanced measurement approaches for calculating risk-weighted assets for operational risk. …  Read More

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Basel Committee Revises Basel III Liquidity Coverage Ratio

The Basel Committee has made significant revisions to the Basel III Liquidity Coverage Ratio (LCR). The revised LCR standards allow banks to use a broader range of liquid assets to meet their liquidity buffer and relax some of the run-off assumptions that banks must make in calculating their net cash outflows. The revised standards also clarify that banks may dip below the minimum LCR requirement during periods of stress. The Basel Committee expects national regulators to implement the LCR on a phased-in basis beginning on January 1, 2015.…  Read More

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Dodd-Frank Enhanced Prudential Standards for Foreign Banking Organizations

The Federal Reserve has proposed a tiered approach for applying U.S. capital, liquidity and other Dodd-Frank enhanced prudential standards to the U.S. operations of foreign banking organizations with total global assets of $50 billion or more (“Large FBOs”). Most Large FBOs would have to create a separately capitalized top-tier U.S. intermediate holding company (“IHC”) that would hold all U.S. bank and nonbank subsidiaries. The IHC would be subject to U.S. capital, liquidity and other enhanced prudential standards on a consolidated basis.…  Read More

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Governor Tarullo Foreshadows Proposal to Ring-Fence Large U.S. Operations of Foreign Banks

In an unprecedented and provocative speech, Federal Reserve Governor Daniel K. Tarullo foreshadowed a proposal from the Federal Reserve Board that could fundamentally change the way foreign banks are regulated in the United States. As previewed, the proposal would require foreign banks with large operations in the U.S. to create a separately capitalized top-tier U.S. intermediate holding company (“IHC”) that would sit on top of all U.S. bank and nonbank subsidiaries. The IHC would be required independently to meet all U.S.…  Read More

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2013 CCAR Process Begins and U.S. Basel III Rules Are Delayed

The Federal Reserve launched the 2013 capital planning and stress testing process for large bank holding companies with the publication of two sets of instructions: one set for the 19 bank holding companies that participated in the 2011 Comprehensive Capital Analysis and Review (CCAR) process and another set for 11 other large bank holding companies that did not participate in the 2011 CCAR process. Among other changes from the 2012 process, the 2013 instructions reveal how the Dodd-Frank Act’s stress testing requirements will be integrated with the Federal Reserve’s capital planning requirements for the banking holding companies that participated in the 2011 CCAR process, and indicate that such bank holding companies will have a one-time opportunity to make a downward revision to any planned capital distributions before the Federal Reserve publishes its assessment of capital plans and will be required to publish their own summaries of certain company-run stress tests.…  Read More

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