District Circular Letters
September 1, 1998
REGULATIONS H and Y:
RISK-BASED CAPITAL STANDARDS
To All State Member Banks,
Bank Holding Companies, and Others Concerned
in the Twelfth Federal Reserve District
Final Amendment Regarding Capital Treatment of Unrealized Holding
Gains (R-0982)
The Federal Reserve Board, the Office of the Comptroller of the Currency,
the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision
are amending their respective risk-based capital standards for banks,
bank holding companies, and thrifts regarding the capital treatment of
unrealized holding gains on certain equity securities.
These gains are reported as a component of equity capital under U.S.
generally accepted accounting principles (GAAP), but have not been included
in regulatory capital under the banking agencies' capital standards.
The final rule is effective October 1, 1998. However,
institutions may elect to comply immediately.
The final rule permits institutions to include in supplementary (Tier
2) capital up to 45 percent of the pretax net unrealized holding gains
on certain available-for-sale (AFS) equity securities. The final rule
is intended to make the capital treatment of these unrealized gains consistent
with the international standards of the Basle Accord.
Copies
Copies of the Board's notice (Docket
R-0982) are available from our Corporate Services Department.
To request copies to be sent via mail, please call (415) 974-2748.
To request copies to be sent via fax, please call (415) 974-3333,
and specify document number 4168.
Additional Information
For additional information regarding Regulations H and Y, please contact
our Banking Supervision and Regulation Department, at (415) 974-2927.
FEDERAL RESERVE BANK OF SAN FRANCISCO
|
