On 2 July 2013, the U.S. Federal Reserve approved a Final Rule that will implement the Basel III framework in the U.S. The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation approved the Final Rule on 9 July 2013. The Final Rule takes effect on 1 January 2014, mirroring the European Union's implementation date for the framework, reducing the potential scope for regulatory arbitrage between the European and U.S. systems. However, while "advanced banks" (mainly large banking organisations) will implement the framework from 1 January 2014, for "standardized banks" (which comprise the majority of U.S. banks), the Final Rule takes effect one year later, on 1 January 2015. The Final Rule also implements several additional amendments to U.S. regulatory rules that have been introduced by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Our U.S. Team has prepared a Client Newsletter following approval of the Final Rule, which focuses on the Simplified Supervisory Formula Approach method for calculating risk weights for securitisation exposures.
Federal Reserve Final Rule