Academic journal article ABA Banking Journal

Thumbs Mostly Up for New Fed Capital Definition

Academic journal article ABA Banking Journal

Thumbs Mostly Up for New Fed Capital Definition

Article excerpt

ABA generally approved of a revised definition of "capital stock and surplus" as proposed by the Federal Reserve for the purpose of calculating the allowable total of covered transactions with affiliates under Section 23A of the Federal Reserve Act. ABA stated that there are two positives to the change and one negative.

The positives: the new definition is consistent with that used in Regulation O and for national bank lending limits, and, being based on call report data, would only have to be computed quarterly.

One negative, which ABA felt was outweighed by the positives, was that the new definition was somewhat more restrictive than the old one.

In other recent actions, ABA:

* Joined with eight other trade groups to object to a Clinton Administration plan to raise additional funds by hiking the penalties banks and other parties face when they fail to file information returns with the Internal Revenue Service. For banks, this would include all the various versions of Form 1099. "Our industries prepare a substantial number of information returns in good faith for the benefit of the IRS, and we strongly object to changing the penalty structure in such a significant manner solely for revenue-raising purposes," the groups wrote. …

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