Banking Agencies Finalize Revisions to Capital Rules Applicable to Advanced Approaches Banking Organizations

The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency (collectively, the "Agencies") finalized revisions to the regulatory capital rules adopted in July 2013.

The final rule applies only to large, internationally active banking organizations that determine their regulatory capital ratios under the advanced approaches rule; generally, it applies to those with at least $250 billion in total consolidated assets or at least $10 billion in total on-balance sheet foreign exposures. The Agencies published changes to the rules affecting these organizations on December 19, 2014, and the final rule adopts those changes largely as proposed.

The final rule also corrects and updates certain aspects of the advanced approaches rule, including the calculation requirements for risk-weighted assets for banking organizations that use the advanced approaches rule.

The final rule will become effective on October 1, 2015.

See: FRB Press Release; FDIC Press Release; OCC Press Release. Related news: Banking Agencies Propose Technical Corrections and Clarifications to Capital Rules (November 18, 2014).