Compensation for each mitigation bank is based on wet land functions lost as determined during the Corps review. The Corps permit will specify how much mitigation is required after avoidance and minimization have been con sidered. Federal regulatory guidance for mitiga tion banking requires that bank replacement wetlands be in place and functional before they can generate usable bank credits. The method used to evaluate bank credits is tied to bank and area specific wetland goals. The best credit valuation method for any particular bank is to use the simplest method that can achieve the specific wetland goals.
Regulators expect compensation ratios to account for risk and uncertainty.
Bank failures sometimes occur. Therefore, bank agreements must contain enforceable liability rules. These rules are important because banks might not provide fully functioning wetlands before credit trades occur. Liability rules assure that compensatory mitigation will be provided for each credit trade that is made. Mechanisms can be used to reduce the likelihood that the public will have to assume financial responsibility for bank failure.