Financial Regulatory Forum

Federal Reserve issues technical fix to market-risk capital rule to conform with Basel III

By Guest Contributor
December 12, 2013

By Bora Yagiz, Compliance Complete

NEW YORK, Dec. 12 (Thomson Reuters Accelus) - The Federal Reserve Board issued a final rule that makes technical changes to the Board’s market-risk capital rule to align it with the Basel III revised capital framework adopted by the Board earlier this year.

The market-risk capital rule is used by banking organizations with significant trading activities to calculate regulatory capital requirements for market risk. Technical changes include the following:

  • modifications by the Organization for Economic Cooperation and Development regarding country risk classifications;
  • modification on the definition of a covered position;
  • clarifications regarding the criteria for determining whether underlying assets are delinquent for certain traded securitization positions; and
  • clarifications on disclosure deadlines.

Each of these changes makes the market risk capital rule consistent with the revised capital framework that will come into effect in January 2015.

(This article was produced by the Compliance Complete service of Thomson Reuters Accelus. Compliance Complete provides a single source for regulatory news, analysis, rules and developments, with global coverage of more than 400 regulators and exchanges. Follow Accelus compliance news on Twitter: @GRC_Accelus)

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
  •