The Federal Deposit Insurance Corporation is seeking comment on proposed guidelines for determining how adjustments of up to 0.50 basis points would be made to the quarterly assessment rates of insured institutions defined as large (generally over $10 billion) Risk Category I institutions, and insured foreign branches in Risk Category I, according to the Final Assessments Rule (71 FR 69282, Nov. 30, 2006). These guidelines are intended to further clarify the analytical processes and the controls applied in making assessment rate adjustments. Comments on these proposed guidelines are due by March 23.
As indicated in the Final Assessments Rule, the initial assessment rates of large institutions in Risk Category I will be determined by a combination of supervisory ratings, long-term debt issuer ratings, and financial ratios for institutions that have no long-term debt issuer ratings. The Final Assessment Rule also indicated that FDIC may determine, in consultation with the primary federal regulator, whether limited adjustments to these initial assessment rates are warranted based upon consideration of additional risk information. Although the FDIC expects that such adjustments will be made relatively infrequently and for a limited number of institutions, FDIC believes that adjustments may on occasion be necessary to preserve consistency in the orderings of risk indicated by these assessment rates, ensure fairness among all large institutions, and ensure that assessment rates take into account all available information that is relevant to the FDIC's risk-based assessment decision.
Institutions are encouraged to provide comment on all aspects of the proposed guidelines as well as comment on directed questions pertaining to whether and how the FDIC should evaluate various categories of information such as stress considerations, qualitative loss severity information, the potential availability of parent company and affiliate support, risk information developed from the implementation of proposed international capital standards, and the existence of supervisory orders that may be less directly related to an institution's safety and soundness.