Magazine article American Banker

Comptroller Approves Capital Rule; Joins Federal Deposit Insurance Corp. in Raising Capital-Assets Ratio to 6%

Magazine article American Banker

Comptroller Approves Capital Rule; Joins Federal Deposit Insurance Corp. in Raising Capital-Assets Ratio to 6%

Article excerpt

WASHINGTON -- The Office of the Comptroller of the Currency joined the Federal Deposit Insurance Corp. on Monday in approving final rules raising the capital requirements for banks.

The rules, first proposed last year, require all national and FDIC-insured state nonmember banks, regardless of size, to maintain a capital-to-assets ratio of 6%, including a mandatory ratio of primary capital to assets of 5.5%. The insurance agency finalized its capital requirement rule in February.

As a result of the new rules, the two agencies estimated that banks will have to raise an additional $6.3 billion in capital. Banks have already raised more than $2.5 billion in anticipation of the new rules.

The FDIC had previously required state nonmember banks to maintain a 5% ratio, while the Comptroller had enforced a standard ratio of 6% for community banks and 5.5% for multi-national and regional banks.

The Federal Reserve Board is now in the process of finishing its own rules which will set the same minimum requirements for state member banks and bank holding companies. On March 1, the Fed gave tentative approval to those guidelines but postponed final approval until the agency's staff could iron out a few details with the other agencies. …

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