The Board of Governors of the Federal Reserve System (FED) is adopting a proposal to extend for three years, without revision, the Basel II Interagency Pillar 2 Supervisory Guidance (FR 4199). The Pillar 2 Guidance is intended to assist banking organizations that are subject to the Basel II advanced approaches capital adequacy framework in applying that framework. As per the estimates provided in the Federal Register notice, this development is estimated to impact 15 state member banks and bank holding companies that use the advanced approaches framework.
Advanced approaches banking organizations are required to use an internal ratings-based approach to calculate the regulatory credit risk capital requirements and advanced measurement approaches to calculate the regulatory operational risk capital requirements. Banking organizations are required to meet certain qualification requirements before they can use the advanced approaches framework for risk-based capital purposes. The Pillar 2 Guidance sets the expectation that such organizations maintain certain documentation (as described in certain paragraphs—37, 41, 43, and 46—of the guidance. FED had published a notice in the Federal Register (86 FR 30603), on June 09, 2021, requesting public comment for 60 days on the extension, without revision, of the Pillar 2 Guidance. The comment period for this notice expired on August 09, 2021. FED did not receive any comments.
Related Link: Federal Register Notice
Keywords: Americas, US, Banking, Pillar 2, Internal Ratings Based, Credit Risk, Operational Risk, Regulatory Capital, Basel, Advanced Approaches, FED
Previous ArticleESAs Report on Supervisory Independence of Competent Authorities
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.
The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.
The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).
The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.
The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.
The International Organization of Securities Commissions (IOSCO) welcomed the work of the international audit and assurance standard setters—the International Auditing and Assurance Standards Board (IAASB)
The Bank of England (BoE) published a Statistical Notice (2022/18), which informs that due to the Bank Holiday granted for Her Majesty Queen Elizabeth II’s State Funeral on Monday September 19, 2022.
The French Prudential Control and Resolution Authority (ACPR) announced that the European Banking Authority (EBA) has updated its filing rules and the implementation dates for certain modules of the EBA reporting framework 3.2.
The European Central Bank (ECB) published a paper that examines how credit rating agencies accepted by the Eurosystem, as part of the Eurosystem Credit Assessment Framework (ECAF)
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility (CLF) for authorized deposit-taking entities to ~USD 33 billion on September 01, 2022.