Federal Reserve System February 22, 2006 – Federal Register Recent Federal Regulation Documents

Formations of, Acquisitions by, and Mergers of Bank Holding Companies
Document Number: E6-2458
Type: Notice
Date: 2006-02-22
Agency: Federal Reserve System, Agencies and Commissions
Risk-Based Capital Guidelines; Market Risk Measure; Securities Borrowing Transactions
Document Number: 06-1533
Type: Rule
Date: 2006-02-22
Agency: Federal Deposit Insurance Corporation, Agencies and Commissions, Federal Reserve System, Office of the Comptroller of the Currency, Department of Treasury, Department of the Treasury, Comptroller of the Currency
The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), and the Federal Deposit Insurance Corporation (FDIC) (collectively, the Agencies) are issuing a final rule that amends their market risk rules to revise the risk-based capital treatment for cash collateral that is posted in connection with securities borrowing transactions. This final rule will make permanent, and expand the scope of, an interim final rule issued in 2000 (the interim rule) that reduced the capital requirement for certain cash-collateralized securities borrowing transactions of banks and bank holding companies (banking organizations) that have adopted the market risk rule. This action more appropriately aligns the capital requirements for these transactions with the risk involved and provides a capital treatment for U.S. banking organizations that is more in line with the capital treatment to which their domestic and foreign competitors are subject.