Federal Reserve System July 31, 2008 – Federal Register Recent Federal Regulation Documents

Supervisory Guidance: Supervisory Review Process of Capital Adequacy (Pillar 2) Related to the Implementation of the Basel II Advanced Capital Framework
Document Number: E8-17555
Type: Rule
Date: 2008-07-31
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, Office of Thrift Supervision, Comptroller of the Currency
The agencies are publishing guidance regarding the supervisory review process for capital adequacy (Pillar 2) provided in the Basel II advanced approaches final rule, which was published in the Federal Register on December 7, 2007 (advanced approaches final rule). The supervisory review process described in this guidance outlines the agencies' standards for satisfying the qualification requirements provided in the advanced approaches final rule; addressing the limitations of the minimum risk-based capital requirements for credit risk and operational risk; ensuring that each institution has a rigorous process for assessing its overall capital adequacy in relation to its risk profile and a comprehensive strategy for maintaining appropriate capital levels; and encouraging each institution to improve its risk identification and measurement techniques. This supervisory guidance applies to any bank, savings association, or bank holding company \1\ implementing the advanced approaches final rule.