Federal banking agencies amend capital rules to encourage support of recovery

Federal Issues OCC FDIC Federal Reserve FRB Deposits

On October 8, the OCC, FDIC and Federal Reserve Board finalized two rules intended to encourage depository institutions to utilize their capital buffers, which must be maintained in order to avoid having restrictions placed on capital distributions, for lending and other financial intermediation activities. The agencies amended rules governing risk-based capital and leverage ratio requirements for U.S. banking organizations, to make limitations on capital distributions more gradual in nature. The agencies also amended rules governing the total loss-absorption capacity of the largest U.S. bank holding companies and U.S. operations of the largest foreign banking organizations.