One week after federal regulators issued their "final" rules for implementing Basel III capital requirements, the regulators on Tuesday proposed doubling a key requirement for the nation's “largest, most systemically significant” banks.
In separate statements Tuesday, the Office of the Comptroller of the Currency (OCC), FDIC, and the Federal Reserve Board (FRB) announced a proposed rule that would require certain banks to meet a 6% supplementary leverage ratio to be considered “well capitalized.”
“I’m pleased that the new capital rule not only improves the quantity and quality of capital, but does so in a way that minimizes the burden on community banks and federal savings associations,” said Comptroller of the Currency Thomas J. Curry.
The 6% minimum Basel III supplementary tier 1 leverage ratio requirement will apply to banks with total assets of more than $700 billion. The proposal would also require covered bank holding companies to maintain a tier 1 capital leverage buffer of at least 2% above the minimum supplementary leverage ratio requirement of 3%, for a total of 5%, the regulators stated.
Currently, the proposed rule would apply to eight banks. If adopted, the rule would take effect on January 1, 2018.