On April 7, 2016, the US Board of Governors of the Federal Reserve System proposed technical amendments to its rule requiring a risk-based capital surcharge for global systemically important bank holding companies. The rule, finalized by the Federal Reserve Board in July 2015, establishes the criteria for identifying a GSIB and the methodology a GSIB is required to use to determine its risk-based capital surcharge, which corresponds to the systemic risk of that firm.
The proposed amendments would not materially change the underlying final rule but rather clarify that GSIBs must continue to calculate their surcharges using year-end data, while their related surcharge data will be reported on a quarterly basis. The proposal explains that bank holding companies subject to the rule are required to compute their method 2 surcharge scores using systemic indicator amounts expressed in billions of dollars even though the data is reported in millions of dollars. The amendments also provide additional information on how GSIBs should calculate their short-term wholesale funding scores, which help to determine their surcharges, during the rule’s transition period.
Comments on the proposal are due by May 13, 2016.
The Federal Reserve Board press release is available at: http://www.federalreserve.gov/newsevents/press/bcreg/20160407a.htm and the proposal is available at: https://www.gpo.gov/fdsys/pkg/FR-2016-04-08/pdf/2016-08015.pdf.