FED Proposes to Revise Information Collection Under Market Risk Rule
FED proposed to extend for three years, with revision, the information collection under the market risk capital rule (FR 4201; OMB No. 7100-0314). FED also published a draft supporting statement on information collection under the market risk capital rule. Comments must be submitted by June 10, 2019. There are no required reporting forms associated with the information collection and the FR 4201 designation is for internal purposes only.
The market risk rule requires banking organizations to hold capital to cover their exposure to market risk and is an important component of the regulatory capital framework. The respondents for this collection of information are bank holding companies, savings and loan holding companies, intermediate holding companies, and state member banks that meet certain risk thresholds. The information collections allow FED to assess the levels and components of each reporting institution's risk-based capital requirements for market risk and the adequacy of the institution's capital under the market risk rule. Additionally, these collections of information ensure capital adequacy of banking organizations according to their level of market risk and assist FED in implementing and validating the market risk framework. The current annual burden for the FR 4201 is estimated to be 70,704 hours and the proposed revisions would result in a net decrease in burden of 57,556 hours.
The market risk rule requires a subject banking organization to obtain the FED approval prior to using any internal model to calculate its risk-based capital requirements. The market risk rule also requires subject banking organizations to:
- Have clearly defined policies and procedures for determining which trading assets and trading liabilities are trading positions and which trading positions are correlation trading positions
- Have clearly defined trading and hedging strategies for trading positions
- Retain certain financial and statistical information regarding the institution's FED-approved subportfolios of its portfolio exposures subject to the market risk rule
- Have a formal disclosure policy that addresses the banking organization's approach for determining the market risk disclosures
- Make certain public quantitative disclosures
Related Links
Comment Due Date: June 10, 2019
Keywords: Americas, US, Banking, Market Risk Capital Rule, FR 4201, Regulatory Capital, Regulation Q, Market Risk, FED
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
Bundesbank Releases XBRL Taxonomy 2.9 for ReportingRelated Articles
ECB Amends Guideline on Temporary Collateral Easing Measures
ECB published Guideline 2021/975, which amends Guideline ECB/2014/31, on the additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral.
EIOPA Releases Report on Artificial Intelligence Governance Principles
EIOPA published a report, from the Consultative Expert Group on Digital Ethics, that sets out artificial intelligence governance principles for an ethical and trustworthy artificial intelligence in the insurance sector in EU.
HKMA to Increase Focus on Suptech and Regtech Cloud Adoption
HKMA published the seventh and final issue of the Regtech Watch series, which outlines the three-year roadmap of HKMA to integrate supervisory technology, or suptech, into its processes.
EC Consults on Improving Transparency in Secondary Markets for NPLs
EC launched a targeted consultation to improve transparency and efficiency in the secondary markets for nonperforming loans (NPLs).
BIS and Nordic Central Banks Launch Innovation Hub in Stockholm
BIS, Danmarks Nationalbank, Central Bank of Iceland, Norges Bank, and Sveriges Riksbank launched an Innovation Hub in Stockholm, making this the fifth BIS Innovation Hub Center to be opened in the past two years.
FDIC Tech Sprint Aims to Explore Technologies to Reach Unbanked
FDITECH, the technology lab of FDIC, announced a tech sprint that is designed to explore new technologies and techniques that would help expand the capabilities of community banks to meet the needs of unbanked individuals and households.
EC Releases Sustainable Finance Taxonomy Compass
EC released the EU Taxonomy Compass, which visually represents the contents of the EU Taxonomy starting with the EU Taxonomy Climate Delegated Act.
FDIC Proposes Amendments to Real Estate Lending Standards
FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.
EIOPA to Consider Liquidity Risk in Stress Test for 2021
EIOPA published its annual report, which sets out the work done in 2020 and indicates the planned work areas for the coming months.
ESRB Paper Discusses Measurement of Impact of Bank Failure via Lending
The ESRB paper that presents an analytical framework that assesses and quantifies the potential impact of a bank failure on the real economy through the lending function.
