On November 18, 2014, the US Board of Governors of the Federal Reserve System (“Federal Reserve Board”), along with the Federal Deposit Insurance Corporation (“FDIC”) and Office of the Comptroller of the Currency (“OCC”), issued proposals to clarify the revised regulatory capital framework adopted in July 2013 applicable to “Advanced Approaches” banking institutions – generally those with $250 billion or more in total assets or $10 billion or more in foreign exposure. The proposals would make technical (but substantive) revisions that will make certain definitions clearer, correct technical errors, clarify the “Advanced Approaches” rule qualification requirements and more closely align the US rules with international rules. For example, the proposal would revise the definition of residential mortgage exposure to provide that, for the purpose of calculating capital requirements under the advanced approaches, any exposure secured by a lien on residential property must be managed as part of a segment of exposures with homogenous risk characteristics, and not on an individual basis, to be considered a residential mortgage exposure. Comments are required to be submitted within 60 days of publication in the Federal Register.
The Proposal and press release are available at: