Fed delays capital requirements rules for bank holding companies

The Federal Reserve has postponed new capital requirements ratios for bank holding companies for two years, in an effort to allow banks to boost capital levels amid continued weakness in the financial markets.

The postponement will give banks more flexibility on how they meet their capital requirements. Specifically, banks will be allowed to continue to include cumulative perpetual preferred stock, trust preferred securities and minority interests up to a level of 25% in core capital. The change, which was set to be implemented on March 31, would have capped issuance levels at 15%.

Tier 1 capital, which typically includes common stock and retained earnings, is used by regulators to measure the capital adequacy of a bank. The postponement was motivated by "the continuing stressed conditions in the financial markets and in order to promote stability in the financial markets and banking industry as a whole", according to a statement by the Fed.

See also: Basel Committee to look at Tier 1 capital quality
Capital Smorgasbord

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Stemming the tide of rising FX settlement risk

As the trading of emerging markets currencies gathers pace and broader uncertainty sweeps across financial markets, CLS is exploring alternative services designed to mitigate settlement risk for the FX market

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here