US regulators have issued final Pillar II guidance for US banks using the advanced measurement approach
WASHINGTON, DC – US regulators have issued final guidance detailing the supervisory review process for the core banks adopting the advanced measurement approach (AMA) under the Basel II Accord.
The guidance was jointly issued by the Treasury, Federal Reserve, Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC) and the Office of Thrift Supervision (OTS) to help the banks meet standards set for the AMA on April 1 this year.
The final guidance lays out the regulators’ standards for Pillar II, ensuring each institution has proper processes for assessing overall risk-based capital adequacy, and an overall strategy in place for maintaining correct capital levels. The AMA breaks down into Pillar I (capital adequacy), Pillar II (supervisory review of capital adequacy) and Pillar III (market discipline through enhanced disclosure).
Some lessons have been drawn from the market experience and ongoing stresses of the past year, although the overall final guidance does not differ significantly from that proposed in February 2007.
More on Basel Committee
Changes proposed for correlation, exotic derivatives and hard-to-model risks
Capital for modelling banks could jump by half if 75% floor is applied to SA-CCR
Basel rules allow a combination of internal and standardised models
Axel Weber says Basel III has not made the financial system better
Sign up for Risk.net email alerts
Catch up with the debate at OpRisk's flagship London conference
Sponsored video: Elseware
Oxford professor David Vines argues that the carrot is as important as the stick
Sponsored webinar: IBM
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.