On July 16, 2014, the Board of Governors of the Federal Reserve System (“Federal Reserve Board”), the FDIC and the OCC jointly finalized a technical correction of the definition of “eligible guarantee” in the agencies’ risk-based capital rules. The correction clarifies the definition of “eligible guarantee” by elaborating on the types of guarantees that can be recognized for purposes of calculating a banking organization’s regulatory capital. The correction impacts banking organizations that calculate their regulatory capital ratios under the advanced approaches framework, which generally applies to large international banking organizations with at least $250 billion in total consolidated assets or at least $10 billion in total on-balance sheet foreign exposures. The final rule becomes effective on October 1, 2014.
The full text of the final rule revising the definition of “eligible guarantee” is available at: http://www.fdic.gov/news/board/2014/2014-07-15_notice_sum_b_fr.pdf.