Bank Agencies Finalize Technical Correction of Risk-Based Capital Rules

The Board of Governors of the Federal Reserve System, the FDIC and the Office of the Comptroller of the Currency (the "Agencies") finalized a technical correction to the definition of "eligible guarantee" in the Agencies' risk-based capital rules.

The final rule removes the requirement that an eligible guarantee be made by an eligible guarantor for purposes of calculating the risk-weighted assets of an exposure under the advanced approaches risk-based capital rule as incorporated into Subpart E of the 2013 Capital Rule.

The change to the definition of "eligible guarantee" applies to all banks, savings associations, bank holding companies, and savings and loan holding companies that are subject to the advanced approach.

The rule will become effective on October 1, 2014.