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Home Archive for category "Supervisory Guidance" (Page 2)
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Federal Reserve Advises Large Banking Organizations to Carefully Evaluate Certain Risk-Transfer Transactions

Today, the Federal Reserve issued a Supervision and Regulation letter (SR letter) entitled Risk Transfer Considerations When Assessing Capital Adequacy – Supplemental Guidance on Consolidated Supervision Framework for Large Financial Institutions.

The SR letter applies to U.S. bank holding companies and savings and loan holding companies with consolidated assets of $50 billion or more as well as foreign banking organizations with combined assets of U.S. operations of $50 billion or more (collectively, “large banking organizations”).

The purpose of the SR letter is to provide guidance on how certain risk transfer transactions affect assessments of capital adequacy at large banking organizations. …  Read More

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Davis Polk Blackline Comparing 2014 CCAR Instructions with 2013 Instructions

Yesterday, the Federal Reserve issued instructions for the 2014 Comprehensive Capital Analysis and Review (CCAR).  Thirty bank holding companies with $50 billion or more of total consolidated assets will participate in the 2014 CCAR, including 18 bank holding companies that participated in the 2013 CCAR and 12 bank holding companies that will participate in CCAR for the first time.

We have created a blackline that compares the Federal Reserve’s 2014 CCAR instruction with its 2013 instructions.

View Blackline Comparing 2014 CCAR Instructions with 2013 Instructions (PDF) Read More

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Advanced Approaches Capital Rules: Federal Reserve Issues Guidance for Implementing the Supervisory Formula Approach for Securitization Exposures

The Federal Reserve’s Basel Coordination Committee has issued guidance regarding supervisory expectations for determining the capital requirements on the underlying exposures (KIRB) input to the Supervisory Formula Approach (SFA) for securitization exposures and the flexibility afforded to advanced approaches banking organizations when dealing with data limitations.  Federal Reserve and OCC staff worked together on the development of this guidance.

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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Federal Reserve Publishes Paper on Capital Planning at Large Bank Holding Companies

Today, the Federal Reserve published a paper entitled Capital Planning at Large Bank Holding Companies: Supervisory Expectations and Range of Current Practice.  The paper is intended to promote better capital planning at large bank holding companies (BHCs) and to provide greater clarity on the standards against which those practices are evaluated as part of the Federal Reserve’s annual Comprehensive Capital Analysis and Review (CCAR).

The paper discusses the Federal Reserve’s expectations for capital planning at large BHCs and described the range of practices it has observed at these companies during the past three CCAR exercises. …  Read More

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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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