Joint Final Rule, Effective July 1, 1999
To All State Member Banks and Bank Holding Companies in the Second Federal Reserve District:
The Board of Governors of the Federal Reserve System, together with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, have adopted as final an interim rule amending their risk-based capital standards for market risk applicable to certain banks and bank holding companies with significant trading activities.
The interim rule, which implemented a revision to the Basle Accord adopted in 1997, was contained in our Circular No. 11013, dated January 2, 1998. Prior to the revision, an institution that measured specific risk with an internal model that adequately measured such risk was subject to a minimum capital charge. The final rule reduces regulatory burden for such institutions, because they no longer must calculate a standardized specific risk capital charge.
The official notice of the joint final rule, as published in the Federal Register of April 19, is available as a file (pdf - 55kb). Questions on this matter may be directed, at this Bank, to Stefan Walter, Assistant Vice President, Advisory and Technical Services, Bank Supervision.