FED proposed to extend for three years, without revision, the information collection on Basel II Interagency Pillar 2 Supervisory Guidance, also known as the Pillar 2 Guidance (FR 4199; OMB Control Number: 7100-0320). This report relates to the advanced approaches framework, which requires certain banks and bank holding companies to use an internal ratings-based approach to calculate regulatory credit risk capital requirements and advance measurement approaches to calculate regulatory operational risk capital requirements. Comments must be submitted on or before December 21, 2018.
A bank is required to comply with the advanced approaches framework if it meets either of the two independent threshold criteria: consolidated total assets of USD 250 billion or more, as reported on the most recent year-end regulatory reports; or consolidated total on-balance sheet foreign exposure of USD 10 billion or more at the most recent year-end. Furthermore, a bank holding company is required to comply with the advanced approaches framework if the holding company has either of the following:
- Consolidated total assets (excluding assets held by an insurance underwriting subsidiary) of USD 250 billion or more, as reported on the most recent year-end regulatory reports
- Consolidated total on-balance sheet foreign exposure of USD 10 billion or more at the most recent year-end
- A subsidiary depository institution that meets the criteria to be subject to the advanced approaches rule or elects to adopt the advanced approaches
As of year-end 2017, 13 bank holding companies meet the above criteria and are, therefore, subject to the advanced approaches rule. Additionally, some banks or bank holding companies may voluntarily decide to adopt the advanced approaches framework.
Related Link: Proposed Rule in Federal Register
Comment Due Date: December 21, 2018
Keywords: Americas, US, Banking, FR 4199, Pillar 2, Basel II, FED
Previous ArticleFSB Report Maps Interdependencies Between CCPs and Clearing Members
Next ArticleESMA Updates Validation Rules Under EMIR
EBA issued a revised list of validation rules with respect to the implementing technical standards on supervisory reporting.
EBA published its response to the call for advice of EC on ways to strengthen the EU legal framework on anti-money laundering and countering the financing of terrorism (AML/CFT).
NGFS published a paper on the overview of environmental risk analysis by financial institutions and an occasional paper on the case studies on environmental risk analysis methodologies.
MAS published the guidelines on individual accountability and conduct at financial institutions.
APRA published final versions of the prudential standard APS 220 on credit quality and the reporting standard ARS 923.2 on repayment deferrals.
SRB published two articles, with one article discussing the framework in place to safeguard financial stability amid crisis and the other article outlining the path to a harmonized and predictable liquidation regime.
FSB hosted a virtual workshop as part of the consultation process for its evaluation of the too-big-to-fail reforms.
ECB updated the list of supervised entities in EU, with the number of significant supervised entities being 115.
OSFI published the key findings of a study on third-party risk management.
FSB is extending the implementation timeline, by one year, for the minimum haircut standards for non-centrally cleared securities financing transactions or SFTs.