The Federal Reserve, FDIC and Office of the Comptroller of the Currency today issued a joint request for comment on a proposal to modify certain regulatory capital standards for large banks.
According to a Fed summary, the proposal would modify certain leverage capital standards applicable to the largest and most systemically important banking organizations so that they serve as a backstop to risk-based capital requirements and do not discourage these banking organizations from engaging in low-risk activities. In particular, it would set the enhanced supplementary leverage ratio for both bank holding companies and their depository institution subsidiaries so that it is based on a banking organization’s overall systemic risk.
The proposal would also make conforming changes to other regulations that are tied to the enhanced supplementary leverage ratio, such as total loss-absorbing capacity and long-term debt requirements.
Comments are due by Aug. 25. The Fed is also planning a July 22 conference on large bank capital requirements.
