On August 30th, the Federal Reserve Board (the "Board"), FDIC, and Office of the Comptroller of the Currency (the "OCC") published in the Federal Register three proposed rules establishing an integrated regulatory capital framework. The agencies had first published the proposals in draft form on June 7, 2012. The proposed rules would implement the Basel III regulatory capital reforms and changes required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act'). The rulemaking was divided into three proposed rules to minimize the burden on smaller and mid-sized banking organizations and to allow firms to focus on the aspects of the proposed revisions that are most relevant to them.
- Regulatory Capital Rules: Regulatory Capital, Implementation of Basel III, Minimum Regulatory Capital Ratios, Capital Adequacy, and Transition Provisions, would apply to all depository institutions, bank holding companies with total consolidated assets of $500 million or more, and savings and loan holding companies.
- Regulatory Capital Rules: Standardized Approach for Risk-Weighted Assets; Market Discipline and Disclosure Requirements, also would apply to all banking organizations. This proposal would revise and harmonize the Board's rules for calculating risk-weighted assets to enhance risk sensitivity and address weaknesses that have been identified over the past several years.
- Regulatory Capital Rules: Advanced Approaches Risk-based Capital Rule; Market Risk Capital Rule, would apply to banking organizations that are subject to the banking agencies' advanced approaches rule or to their market risk rule. This proposal would enhance the risk sensitivity of the current rule for internationally active firms to address counterparty credit risk and interconnectedness among financial institutions. It also would apply the advanced approaches rule and market risk capital rule to savings and loan holding companies that meet the relevant size, foreign exposure, or trading activity thresholds. As part of the restructuring of the capital rules into an integrated framework, this proposal incorporates the final market risk rule that was approved on June 7, 2012, and which was also published in the Federal Register on August 30, 2012. See below.