Supervisory Policy and Guidance Topics
Capital 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.
Policy Letters
Basel Capital AccordsAdvanced Approaches Risk-Based Capital Rule Examination Guidance on the Board's Public Website
Supervisory Guidance on Implementation Issues Related to the Advanced Measurement Approaches for Operational Risk
Interagency Statement on the Community Bank Leverage Ratio Framework
Federal Financial Institutions Examination Council Issues Joint Statement on Managing the LIBOR Transition
Joint Statement on Adjustment to the Calculation for Credit Concentration Ratios Used in the Supervisory Approach
Frequently Asked Questions on the Tailoring Rules
Federal Reserve Supervisory Assessment of Capital Planning and Positions for Firms Subject to Category II or III Standards
Federal Reserve Supervisory Assessment of Capital Planning and Positions for Firms Subject to Category I Standards
Supervisory Concerns Related to Shareholder Protection Arrangements
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)
Supervisory Guidance on Stress Testing for Banking Organizations with More Than $10 Billion in Total Consolidated Assets
Guidance Regarding Prior Notices with Respect to Dividend Declarations by Savings Association Subsidiaries of Savings and Loan Holding Companies
Impact of High-Cost Credit Protection Transactions on the Assessment of Capital Adequacy
Covenants in Securitization Documents Linked to Supervisory Actions or Thresholds
Implicit Recourse Provided to Asset Securitizations
Risk Management and Valuation of Retained Interests Arising from Securitization Activities
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)
Guidance on Model Risk Management
Application of the Market Risk Rule in Bank Holding Companies and State Member Banks
Questions and Interpretations Relating to the Implementation of the Risk-Based Capital Framework
Interagency Statement on the Community Bank Leverage Ratio Framework
Federal Financial Institutions Examination Council Issues Joint Statement on Managing the LIBOR Transition
Questions and Answers (Q&As) on Statement Regarding the Use of Capital and Liquidity Buffers
Interagency Statement on Accounting and Reporting Implications of the New Tax Law
Regulatory Capital Treatment of Certain Centrally-cleared Derivative Contracts under the Board's Capital Rule
Supervisory Guidance on the Capital Treatment of Certain Investments in Covered Funds under the Regulatory Capital Rule and the Volcker Rule
Interagency Frequently Asked Questions (FAQs) on the Regulatory Capital Rule
Tool for Calculating Capital Requirements Using the Simplified Supervisory Formula Approach
Supervisory Guidance on Implementation Issues Related to the Advanced Measurement Approaches for Operational Risk
Derivative Contracts Hedging Trust Preferred Stock
Additional Resources
- Basel Capital Accords, Initiatives, and Other Basel-Related Matters
- Bank of International Settlements
- Basel Coordination Committee Bulletins
- Regulation Q: Capital Adequacy of Bank Holding Companies, Savings and Loan Holding Companies, and State Member Banks
Manual References
- Bank Holding Company Supervision Manual
- 1060.1, "Large Financial Institution Rating System: Capital Planning and Positions"
- 1060.2, "Supervisory Assessment of Capital Planning and Positions for Category I Firms"
- 1060.3, "Supervisory Assessment of Capital Planning and Positions for Category II or III Firms"
- Section 4060.9, "Consolidated Capital Planning Processes (Payment of Dividends, Stock Redemptions, and Stock Repurchases at Bank Holding Companies)"
- Commercial Bank Examination Manual
- Section 3000.1, "Assessment of Capital Adequacy"
- Section 3025.1, "Dividends"
- Section 3030.1, "Overview of Asset-Backed Commercial Paper Programs"
- Section 3035.1, "Prompt Corrective Action"