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Preamble

Table of Contents
          - Introduction 
          - Scope 
          - Qualification 
          - Calculation of Tier 1 Capital and Total Qualifying Capital 
          - Calculation of Risk-Weighted Assets 
          - Operational Risk 
          - Disclosure 

List of Acronyms

Regulatory Flexibility Act Analysis

Paperwork Reduction Act

Plain Language

OCC Executive Order 12866

OTS Executive Order 12866 Determination

OCC Unfunded Mandates Reform Act of 1995 Determination

OTS Unfunded Mandates Reform Act of 1995 Determination

Proposed Regulatory Text

Table of Contents
        - Part I
        - General Provisions
        - Part II
        - Qualifying Capital
        - Part III
        - Qualification
        - Part IV
        - Risk-Weighted Assets for General Credit Risk
        - Part V 
        - Risk-Weighted Assets for Securitization Exposures
        - Part VI
        - Risk-Weighted Assets for Equity Exposures
        - Part VII
        - Risk-Weighted Assets for Operational Risk
        - Part VIII
        - Disclosure

List of Subjects

Authority and Issuance

OCC

Federal Reserve

FDIC

OTS

OCC

Federal Reserve

FDIC

OTS

Billing Codes

A. Request for Comment on Proposed Information Collection

In accordance with the requirements of the Paperwork Reduction Act of 1995,       the agencies may not conduct or sponsor, and the respondent is not required       to respond to, an information collection unless it displays a currently       valid Office of Management and Budget (OMB) control number. The agencies       are requesting comment on a proposed information collection. The agencies       are also giving notice that the proposed collection of information has       been submitted to OMB for review and approval.

Comments are invited on:

(a) Whether the collection of information is necessary for the proper performance       of the agencies' functions, including whether the information has practical       utility;

(b) The accuracy of the estimates of the burden of the information collection,       including the validity of the methodology and assumptions used;

(c) Ways to enhance the quality, utility, and clarity of the information       to be collected;

(d) Ways to minimize the burden of the information collection on respondents,       including through the use of automated collection techniques or other forms       of information technology; and

(e) Estimates of capital or start up costs and costs of operation, maintenance,       and purchase of services to provide information.

Comments should be addressed to: 

OCC: Communications Division, Office of the Comptroller of the Currency,       Public Information Room, Mail stop 1-5, Attention: 1557-NEW,       250 E Street, SW, Washington, DC 20219. In addition,       comments may be sent by fax to 202-874-4448, or by electronic mail to [email protected].       You can inspect and photocopy the comments at the OCC's Public Information       Room, 250 E Street, SW, Washington, DC 20219. You can       make an appointment to inspect the comments by calling 202-874-5043.

Board: You may submit comments, identified by Docket No. R-1261, by any of       the following methods:

· Agency Web Site: http://www.federalreserve.gov.       Follow the instructions for submitting comments on the http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.    

· Federal eRulemaking Portal: http://www.regulations.gov/fdmspublic/component/main.       Follow the instructions for submitting comments.

· E-mail: [email protected].       Include docket number in the subject line of the message.

· FAX: 202-452-3819 or 202-452-3102.

· Mail: Jennifer J. Johnson,       Secretary, Board of Governors of the Federal Reserve System, 20th Street       and Constitution Avenue, NW, Washington, DC 20551.

All public comments are available from the Board's Web site at http://       www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted,       unless modified for technical reasons. Accordingly, your comments will       not be edited to remove any identifying or contact information. Public       comments may also be viewed electronically or in paper form in Room MP-500       of the Board's Martin Building (20th and C Streets, NW)       between 9 a.m. and 5 p.m. on weekdays.

FDIC: You may submit written comments, which should refer to 3064-AC73,       by any of the following methods:

· Agency Web Site: http://www.fdic.gov/regulations/laws/federal/propose.html.       Follow the instructions for submitting comments on the FDIC Web site.

· Federal eRulemaking Portal: http://www.regulations.gov.       Follow the instructions for submitting comments.

· E-mail: [email protected].

· Mail: Robert E. Feldman, Executive Secretary,       Attention: Comments, FDIC, 550 17th Street, NW, Washington, DC       20429.

· Hand Delivery/Courier: Guard station       at the rear of the 550 17th Street Building (located on F Street)       on business days between 7 a.m. and 5 p.m.

Public Inspection: All comments received will be posted without change       to http://www.fdic.gov/regulations/laws/federal/propose/html       including any personal information provided. Comments may be inspected       at the FDIC Public Information Center, Room 100, 801 17th Street, NW,       Washington, DC, between 9 a.m. and 4:30 p.m. on business       days.

A copy of the comments may also be submitted to the OMB desk officer for       the agencies: By mail to U.S. Office of Management and Budget, 725 17th Street, NW, #10235,       Washington, DC 20503 or by facsimile to 202-395-6974, Attention: Federal       Banking Agency Desk Officer.

OTS: Information Collection Comments, Chief Counsel's Office, Office       of Thrift Supervision, 1700 G Street, NW, Washington, DC       20552; send a facsimile transmission to (202) 906-6518; or send an       e-mail to [email protected].       OTS will post comments and the related index on the OTS Internet site at       http://www.ots.treas.gov.       In addition, interested persons may inspect the comments at the Public       Reading Room, 1700 G Street, NW, by appointment. To make       an appointment, call (202) 906-5922, send an e-mail to [email protected],       or send a facsimile transmission to (202) 906-7755.

B. Proposed Information Collection 

Title of Information Collection: Risk-Based Capital       Standards: Advanced Capital Adequacy Framework

Frequency of Response: event-generated

Affected Public:

OCC: National banks and Federal branches and agencies of foreign       banks.

Board: State member banks, bank holding companies, affiliates and       certain non-bank subsidiaries of bank holding companies, uninsured state       agencies and branches of foreign banks, commercial lending companies owned       or controlled by foreign banks, and Edge and agreement corporations.

FDIC: Insured nonmember banks, insured state branches of foreign       banks, and certain subsidiaries of these entities.

OTS: Savings associations and certain of their subsidiaries.

Abstract: The proposed rule sets forth a new risk-based capital adequacy       framework that would require some banks and allow 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. 

The information collection requirements in the proposed rule are found       in sections 21-23, 42, 44, 53, and 71. The collections of information       are necessary in order to implement the proposed advanced capital adequacy       framework.

Sections 21 and 22 require that a bank adopt a written implementation       plan that addresses how it will comply with the proposed advanced capital       adequacy framework's qualification requirements, including incorporation       of a comprehensive and sound planning and governance process to oversee       the implementation efforts. The bank must also develop processes for assessing       capital adequacy in relation to an organization's risk profile. It must       establish and maintain internal risk rating and segmentation systems for       wholesale and retail risk exposures, including comprehensive risk parameter       quantification processes and processes for annual reviews and analyses       of reference data to determine their relevance. It must document its process       for identifying, measuring, monitoring, controlling, and internally reporting       operational risk; verify the accurate and timely reporting of risk-based       capital requirements; and monitor, validate, and refine its advanced systems.    

Section 23 requires a bank to notify its primary Federal supervisor when       it makes a material change to its advanced systems and to develop an implementation       plan after any mergers.

Section 42 outlines the capital treatment for securitization exposures.       A bank must disclose publicly that it has provided implicit support to       the securitization and the regulatory capital impact to the bank of providing       such implicit support. 

Section 44 describes the IAA. A bank must receive prior written approval       from its primary Federal supervisor before it can use the IAA. A bank must       review and update each internal credit assessment whenever new material       is available, but at least annually. It must validate its internal credit       assessment process on an ongoing basis and at least annually.

Section 53 outlines the IMA. A bank must receive prior written approval       from its primary Federal supervisor before it can use the IMA.

Section 71 specifies that each consolidated bank must publicly disclose       its total and tier 1 risk-based capital ratios and their components.

Estimated Burden: The burden estimates below exclude the following:       (1) any burden associated with changes to the regulatory reports of       the agencies (such as the Consolidated Reports of Income and Condition       for banks (FFIEC 031 and FFIEC 031; OMB Nos. 7100-0036,       3064-0052, 1557-0081) and the Thrift Financial Report for thrifts (TFR;       OMB No. 1550-0023); (2) any burden associated with capital       changes in the Basel II market risk rule; and (3) any burden       associated with the Quantitative Impact Study (QIS-4 survey, FR 3045;       OMB No. 7100-0303). The agencies are concurrently publishing       notices, which will address burden associated with the first item (published elsewhere in this issue),       and jointly publishing a rulemaking which will address burden associated       with the second item. For the third item, the Federal Reserve previously       took burden for the QIS-4 survey, and some institutions may leverage the       requirements of the QIS-4 survey to fulfill the requirements of this rule.    

The burden associated with this collection of information may be summarized       as follows:

OCC

Number of Respondents: 52

Estimated Burden Per Respondent: 15,570 hours

Total Estimated Annual Burden: 809,640 hours

Board

Number of Respondents: 15

Estimated Burden Per Respondent: 14,422 hours

Total Estimated Annual Burden: 216,330 hours

FDIC

Number of Respondents: 19

Estimated Burden Per Respondent: 410 hours

Total Estimated Annual Burden: 7,800 hours

OTS

Number of Respondents: 4

Estimated Burden Per Respondent: 15,000 hours

Total Estimated Annual Burden: 60,000 hours 

Basel II Capital AccordNotice of Proposed Rulemaking (NPR)

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