The FRB has clarified that bank holding companies with total consolidated assets of $50 billion or more may estimate their Tier 1 common ratio using the methodology currently in effect in 2013 under the existing capital guidelines, (not the new Basel III rules). The interim final rule also clarifies when a banking organization would estimate its minimum regulatory capital ratios using the advanced approaches for capital-plan and stress-test purposes. Although the new approach will ease operational issues in the new stress-test round, it also results in a higher minimum requirement than would have applied if the Basel III transitional ratios governed the first part of 2014.
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