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Board of Governors of the Federal Reserve System
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Board of Governors of the Federal Reserve System

Supervisory Policy and Guidance Topics

Capital Guidelines and Adequacy

The primary function of capital is to support the bank's operations, act as a cushion to absorb unanticipated losses and declines in asset values that could otherwise cause a bank to fail, and provide protection to uninsured depositors and debt holders in the event of liquidation. Capital regulation is particularly important because deposit insurance and other elements of the federal safety net provide banks with an incentive to increase their leverage beyond what the market--in the absence of depositor protection--would permit. The types and quantity of risk inherent in an institution's activities will determine the extent to which it may be necessary to maintain capital at levels above required regulatory minimums to properly reflect the potentially adverse consequences that these risks may have on the institution's capital.
Sections on this page:  

Policy Letters

Basel Capital Accords

SR 13-4
Advanced Approaches Risk-Based Capital Rule Examination Guidance on the Board's Public Website
SR 11-8
Supervisory Guidance on Implementation Issues Related to the Advanced Measurement Approaches for Operational Risk
SR 08-4
Qualification Process for Advanced Approaches Risk-Based Capital Framework Implementation

Risk Management and Capital

SR 14-3
Supervisory Guidance on Dodd-Frank Act Company-Run Stress Testing for Banking Organizations with Total Consolidated Assets of More Than $10 Billion but Less Than $50 Billion
SR 13-23
Risk Transfer Considerations When Assessing Capital Adequacy – Supplemental Guidance on Consolidated Supervision Framework for Large Financial Institutions (SR letter 12-17/CA letter 12-14)
SR 12-7
Supervisory Guidance on Stress Testing for Banking Organizations with More Than $10 Billion in Total Consolidated Assets
SR 11-13
Guidance Regarding Prior Notices with Respect to Dividend Declarations by Savings Association Subsidiaries of Savings and Loan Holding Companies
SR 11-1
Impact of High-Cost Credit Protection Transactions on the Assessment of Capital Adequacy
SR 09-4
Applying Supervisory Guidance and Regulations on the Payment of Dividends, Stock Redemptions, and Stock Repurchases at Bank Holding Companies
SR 01-1 (SUP)
Application of the Board's Capital Adequacy Guidelines to Bank Holding Companies owned by Foreign Banking Organizations
SR 99-18 (SUP)
Assessing Capital Adequacy in Relation to Risk at Large Banking Organizations and Others with Complex Risk Profiles
SR 98-25 (SUP)
Sound Credit Risk Management and the Use of Internal Credit Risk Ratings at Large Banking Organizations
SR 97-21 (SUP)
Risk Management and Capital Adequacy of Exposures Arising from Secondary Market Credit Activities

Securitization

SR 05-13
Interagency Guidance on the Eligibility of Asset-Backed Commercial Paper Program Liquidity Facilities and the Resulting Risk-Based Capital Treatment
SR 05-6
Risk-Based Capital Treatment for Unrated Direct Credit Substitutes Extended to Asset-Backed Commercial Paper Programs
SR 02-16
Questions and Answers on the Capital Treatment of Recourse, Direct Credit Substitutes, and Residual Interests in Asset Securitizations
SR 02-15
Implicit Recourse Provided to Asset Securitizations
SR 02-14
Covenants in Securitization Documents Linked to Supervisory Actions or Thresholds
SR 02-12
Regulatory Capital Treatment of Accrued Interest Receivables Related to Credit Card Securitizations
SR 99-37 (SUP)
Risk Management and Valuation of Retained Interests Arising from Securitization Activities
SR 99-32 (SUP)
Capital Treatment for Synthetic Collateralized Loan Obligations
SR 97-21 (SUP)
Risk Management and Capital Adequacy of Exposures Arising from Secondary Market Credit Activities
SR 96-30 (SUP)
Risk-Based Capital Treatment for Spread Accounts that Provide Credit Enhancement for Securitized Receivables
SR 92-11
Asset-Backed Commercial Paper Programs
SR 90-16
Implementation of Examination Guidelines for the Review of Asset Securitization Activities

Risk Weighted Assets

SR 13-23
Risk Transfer Considerations When Assessing Capital Adequacy – Supplemental Guidance on Consolidated Supervision Framework for Large Financial Institutions (SR letter 12-17/CA letter 12-14)
SR 11-7
Guidance on Model Risk Management
SR 10-4
Clarification of the Risk Weight for Claims on or Guaranteed by the Federal Deposit Insurance Corporation (FDIC)
SR 09-1
Application of the Market Risk Rule in Bank Holding Companies and State Member Banks
SR 97-18 (GEN)
Application of Market Risk Capital Requirements to Credit Derivatives
SR 96-17 (GEN)
Supervisory Guidance for Credit Derivatives
SR 95-20 (SUP)
Financial Standby Letters of Credit and Performance Standby Letters of Credit
SR 90-23
Questions and Interpretations Relating to the Implementation of the Risk-Based Capital Framework

Regulatory Capital

SR 11-8
Supervisory Guidance on Implementation Issues Related to the Advanced Measurement Approaches for Operational Risk
SR 09-4
Applying Supervisory Guidance and Regulations on the Payment of Dividends, Stock Redemptions, and Stock Repurchases at Bank Holding Companies
SR 02-10
Derivative Contracts Hedging Trust Preferred Stock
SR 02-4
Final Capital Rules for Nonfinancial Equity Investments
SR 01-27
The Use of Forward Equity Transactions by Banking Organizations
SR 93-72 (FIS)
Guidance on the Capital Treatment and Other Issues Relating to the Financial Accounting Standards Board Statement No. 115, "Accounting for Certain Investments in Debt and Equity Securities"
SR 92-37
Clarification of August 28, 1992 Interpretation on Subordinated Debt
 

Additional Resources

 

 

Manual References

  • Bank Holding Company Supervision Manual
    • Section 2128.02, "Asset Securitization (Risk Management and Internal Controls)"
    • Section 2129.0, "Credit Derivatives (Risk Management and Internal Controls)"
    • Section 4060.3, "Consolidated Capital (Examiners’ Guidelines for Assessing the Capital Adequacy of BHCs)"
    • Section 4060.4, "Consolidated Capital (Leverage Measure)"
    • Section 4060.7, "Consolidated Capital (Assessing Capital Adequacy and Risk at Large Banking Organizations and Others with Complex Risk Profiles)"
    • Section 4060.8, "Consolidated Risk-Based Capital—Direct-Credit Substitutes Extended to ABCP Programs"
    • Section 4060.9, "Consolidated Capital Planning Processes (Payment of Dividends, Stock Redemptions, and Stock Repurchases at Bank Holding Companies)"
    • Section 4061.0, "Consolidated Capital (Capital Planning)"
  • Commercial Bank Examination Manual
    • Section 3020.1, "Assessment of Capital Adequacy"
    • Section 3030.1, "Assessing Risk-Based Capital—Direct-Credit Substitutes Extended to ABCP Programs"
    • Section 4070.1, "Dividends"
    • Section 4133.1, "Prompt Corrective Action"
Last update: March 7, 2014