77518 Federal Register / Vol. 71, No. 247 / Tuesday, December 26, 2006 / Proposed Rules 

1As used in this notice, the term ‘‘bank’’ includes 

banks, savings associations, and bank holding 

companies. 

TABLE 7.—EARLY AMORTIZATION

CREDIT CONVERSION FACTORS—

Continued 

Excess spread trapping point 

ratio 

CCF 

(percent) 

Less than 75 percent to 50 percent of trapping point ............ 50 

Less than 50 percent of trapping point .............................. 100 

6. In § 567.11, revise paragraph (c)(2), 

redesignate paragraph (c)(3) as 

paragraph (c)(4) and add new paragraph 

(c)(3) to read as follows: 

§ 567.11 Reservation of authority. 

* * * * * 

(c) * * * 

(2) Notwithstanding §§ 567.6 and 

567.7 of this part, OTS will look to the 

substance of a transaction and may find 

that the assigned risk-weight for any 

asset, or credit equivalent amount or 

credit conversion factor for any offbalance sheet item does not 

appropriately reflect the risks imposed 

on the savings association. OTS may 

require the savings association to apply 

another risk weight, credit equivalent 

amount, or credit conversion factor that 

the OTS deems appropriate. Similarly, 

OTS may override the use of certain 

ratings or ratings on certain instruments, 

if necessary or appropriate to reflect the 

risk that that an instrument poses to a 

savings association. 

(3) OTS may require a savings 

association to use § 567.6 or § 567.7 of 

this part to compute risk-weighted 

assets, if OTS determines that the riskweighted capital requirement computed 

under that section is more appropriate 

for the risk profile of the savings 

association or would otherwise enhance 

the safety and soundness of the savings 

association. In making a determination 

under this paragraph (c)(3), OTS will 

apply notice and response procedures in 

the same manner and to the same extent 

as the notice procedures in 12 CFR 

567.3(d). 

* * * * * 

Dated: December 12, 2006. 

John C. Dugan, 

Comptroller of the Currency. 

By order of the Board of Governors of the 

Federal Reserve System, December 8, 2006. 

Jennifer J. Johnson, 

Secretary of the Board. 

Dated at Washington, D.C., this 5th Day of 

December, 2006. 

By order of the Board of Directors. 

Federal Deposit Insurance Corporation. 

Valerie J. Best, 

Assistant Executive Secretary. 

Dated: December, 11, 2006. 

By the Office of Thrift Supervision 

John Reich, 

Director. 

[FR Doc. 06–9738 Filed 12–22–06; 8:45 am] 

BILLING CODE 4810–33–P(25%); 6210–01–P(25%); 6714–

01–P(25%); 6720–01–P(25%) 

DEPARTMENT OF THE TREASURY 

Office of the Comptroller of the 

Currency 

12 CFR Part 3 

[Docket No. 06–09] 

RIN 1557–AC91 

FEDERAL RESERVE SYSTEM 

12 CFR Parts 208 and 225 

[Regulations H and Y; Docket No. R–1261] 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Part 325 

RIN 3064–AC73 

DEPARTMENT OF THE TREASURY 

Office of Thrift Supervision 

12 CFR Part 566 

[Docket No. 2006–33] 

RIN 1550–AB56 

Risk-Based Capital Standards: 

Advanced Capital Adequacy 

Framework 

AGENCIES: Office of the Comptroller of 

the Currency, Treasury; Board of 

Governors of the Federal Reserve 

System; Federal Deposit Insurance 

Corporation; and Office of Thrift 

Supervision, Treasury. 

ACTION: Joint notice of proposed 

rulemaking; extension of comment 

period. 

SUMMARY: On September 25, 2006, the 

Office of the Comptroller of the 

Currency (OCC), the Board of Governors 

of the Federal Reserve System (Board), 

the Federal Deposit Insurance 

Corporation (FDIC), and the Office of 

Thrift Supervision (OTS) (collectively, 

the agencies) issued a joint notice of 

proposed rulemaking for public 

comment that proposed a new riskbased capital adequacy framework 

(Basel II NPR). The Basel II NPR would 

require some and permit other 

qualifying banks 1 to use an internal 

ratings-based approach to calculate 

regulatory credit risk capital 

requirements and advanced 

measurement approaches to calculate 

regulatory operational risk capital 

requirements. The Basel II NPR 

describes the qualifying criteria for 

banks required or seeking to operate 

under the proposed framework and the 

applicable risk-based capital 

requirements for banks that operate 

under the framework. The Basel II NPR 

comment period will end on January 23, 

2007. 

In today’s issue of the Federal 

Register, the agencies are proposing 

revisions to the existing risk-based 

capital framework that would apply to 

banks that do not use the Basel II NPR 

(Basel IA NPR). The agencies have 

determined that an extension of the 

Basel II NPR comment period is 

appropriate to allow interested parties 

additional time to compare the riskbased capital requirements as proposed 

in the Basel II NPR with the risk-based 

capital requirements as proposed in the 

Basel IA NPR. 

DATES: The comment period for the 

proposed rule published at 71 FR 55830 

(Sept. 25, 2006) is extended until March 

26, 2007. 

ADDRESSES: You may submit comments 

by any of the methods identified in the 

Basel II NPR (See 71 FR 55830, 

September 25, 2006.) 

FOR FURTHER INFORMATION CONTACT: 

OCC: Roger Tufts, Senior Economic 

Advisor, Capital Policy (202–874–4925) 

or Ron Shimabukuro, Special Counsel, 

Legislative and Regulatory Activities 

Division (202–874–5090). Office of the 

Comptroller of the Currency, 250 E 

Street, SW., Washington, DC 20219. 

Board: Barbara Bouchard, Deputy 

Associate Director (202–452–3072 or 

barbara.bouchard@frb.gov) or Anna Lee 

Hewko, Senior Supervisory Financial 

Analyst (202–530–6260 or 

anna.hewko@frb.gov), Division of 

Banking Supervision and Regulation; or 

Mark E. Van Der Weide, Senior Counsel 

(202–452–2263 or 

mark.vanderweide@frb.gov), Legal 

Division. For users of 

Telecommunications Device for the Deaf 

(‘‘TDD’’) only, contact 202–263–4869. 

FDIC: Jason C. Cave, Associate 

Director, Capital Markets Branch, (202) 

898–3548, Bobby R. Bean, Chief, Policy 

Section, Capital Markets Branch, (202) 

898–3575, Kenton Fox, Senior Capital 

Markets Specialist, Capital Markets 


sroberts on PROD1PC70 with PROPOSALS
Federal Register / Vol. 71, No. 247 / Tuesday, December 26, 2006 / Proposed Rules 77519 

Branch, (202) 898–7119, Division of 

Supervision and Consumer Protection; 

or Michael B. Phillips, Counsel, (202) 

898–3581, Supervision and Legislation 

Branch, Legal Division, Federal Deposit 

Insurance Corporation, 550 17th Street, 

NW., Washington, DC 20429. 

OTS: Michael D. Solomon, Director, 

Capital Policy, Supervision Policy (202) 

906–5654; David W. Riley, Senior 

Analyst, Capital Policy (202) 906–6669; 

or Karen Osterloh, Special Counsel, 

Regulations and Legislation Division 

(202) 906–6639, Office of Thrift 

Supervision, 1700 G Street, NW., 

Washington, DC 20552. 

SUPPLEMENTARY INFORMATION: On 

September 25, 2006, the agencies issued 

the Basel II NPR, which proposed a new 

risk-based capital adequacy framework 

that would require some and permit 

other qualifying banks to use an internal 

ratings-based approach to calculate 

regulatory credit risk capital 

requirements and advanced 

measurement approaches to calculate 

regulatory operational risk capital 

requirements. See 71 FR 55830. The 

proposed rule describes the qualifying 

criteria for banks required or seeking to 

operate under the proposed framework 

and the applicable risk-based capital 

requirements for banks that would 

operate under that framework. 

In today’s issue of the Federal 

Register, the agencies are proposing 

revisions to the existing risk-based 

capital framework applicable to banks 

that would not use the Basel II NPR. The 

Basel IA NPR proposes to expand the 

number of risk weight categories, allow 

the use of external credit ratings to risk 

weight certain exposures, expand the 

range of recognized collateral and 

eligible guarantors, use loan-to-value 

ratios to risk weight most residential 

mortgages, and revise other provisions 

of the existing risk-based capital 

requirements to increase the risk 

sensitivity of the risk-based capital rules 

for those banks that will not use the 

proposed risk-based capital 

requirements in the Basel II NPR. 

The agencies believe that it is 

important for interested parties to be 

able to compare the risk-based capital 

requirements in the Basel II NPR and 

Basel IA NPR. Therefore, the agencies 

are extending the comment period for 

the Basel II NPR from January 23, 2007, 

to March 26, 2007. 

Dated: December 5, 2006. 

John C. Dugan, 

Comptroller of the Currency. 

Dated: December 8, 2006. 

By order of the Board of Governors of the 

Federal Reserve System. 

Jennifer J. Johnson, 

Secretary of the Board. 

Dated at Washington, DC, this 5th day of 

December, 2006. 

By order of the Board of Directors, 

Federal Deposit Insurance Corporation. 

Valerie J. Best, 

Assistant Executive Secretary. 

Dated: December 11, 2006. 

John Reich, 

Director. 

[FR Doc. 06–9737 Filed 12–22–06; 8:45 am] 

BILLING CODE 4810–33–P; 6210–01–P; 6714–01–P; 

6720–01–P 


sroberts on PROD1PC70 with PROPOSALS