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Wednesday, August 21, 2013

Request for Comments on Agencies’ Supplemental Leverage Ratio Proposal

The FDIC, Federal Reserve Board and OCC are requesting comment on a jointly proposed rule to amend leverage ratio standards for certain U.S. banking organizations.

The proposed rule would apply to any U.S. top-tier bank holding company (BHC) with at least $700 billion in total combined assets or $10 trillion in assets under custody (covered BHC) and any subsidiary insured depository institution (IDI) of these covered institutions.

The agencies are proposing to establish a “well-capitalized” threshold of 6% for the supplementary leverage ratio—adopted July 2013, consistent with the minimum leverage ratio adopted by the Basel Committee on Banking Supervision—for any IDI that is a subsidiary of a covered BHC, under the agencies’ prompt corrective action framework.

The agencies have also proposed to establish a new leverage buffer for covered BHCs above the minimum supplementary leverage ratio requirement of 3%. A covered BHC would be required to hold a leverage buffer of tier 1 capital greater than 2% of its total leverage exposure.

Comments are due by October 21, 2013.

Read the proposed rule.

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