The Board of Governors of the Federal Reserve recently approved a final rule that increases the minimum requirements that banking institutions must meet with regard to the quantity and quality of their capital, according to a press release from the board. The quantity requirement establishes "a new minimum ratio of common equity tier 1 capital to risk-weighted assets of 4.5 percent and a common equity tier 1 capital conservation buffer of 2.5 percent of risk-weighted assets that will apply to all supervised financial institutions. The rule also raises the minimum ratio of tier 1 capital to risk-weighted assets from 4 percent to 6 percent and includes a minimum leverage ratio of 4 percent for all banking organizations." With regard to the quality of capital, the final rule "implements strict eligibility criteria for regulatory capital instruments." The phase-in period for smaller banking organizations will begin in January 2015, while the phase-in for larger institutions will begin in January 2014. For more, read the full press release.