For immediate release

The Federal Reserve Board has issued a final rule amending the Tier 1 leverage capital standard for bank holding companies. The rule is effective June 30, 1998. The amendment to Regulation Y establishes a minimum ratio of Tier 1 capital to total assets (leverage ratio) of 3.0 percent for bank holding companies that either are rated composite "1" under the BOPEC rating system or have implemented the Board's risk-based capital market risk measure. The minimum leverage ratio for all other bank holding companies is 4.0 percent. Bank holding companies are expected to maintain higher-than-minimum capital ratios if they have supervisory, financial, operational, or managerial weaknesses, or if they are anticipating or experiencing significant growth. The Board's notice is attached.

Summary only | Final rule (15 KB PDF)

1998 Banking and consumer regulatory policy