In my view, neither assumption is true. I'll focus here on the first assumption, as applied to prompt corrective action. For example, an undercapitalized institution cannot pay dividends. Quite a few rules are purely discretionary. That reliance follows naturally, and in some ways unavoidably, from the use of conventional historical-cost accounting data to define depository institutions' capital for purposes of prompt corrective action.
Capital is intrinsically a lagging indicator of problems.
Traditional historical-cost accounting principles accentuate the lag. The upshot is uncertainty about a troubled institution's market value. Because of that uncertainty, prompt corrective action provisions generally give regulators some leeway to make a judgment about the institution's condition and prospects and take actions sooner, or later, than accounting numbers might suggest. By the same token, the statute did contemplate that regulators, in the course of implementation, would develop some limits on their own discretion beyond the minimum prescribed by the statute. They generally do the minimum that the statute requires, and no more.