The FDIC Board today unanimously approved and all three banking agencies subsequently issued an NPR not only to provide modest capital relief for small banks, but also for all banks not subject to the advanced approach. We view this rule as the opening salvo to broader discussion of the overall U.S. approach to the Basel III rules, an effort that will look not only at simplified standardized weightings, but also at the way the U.S. will approach the broader capital framework following a decision next week by the Basel Committee on whether and how to change the global approach to the credit- and operational-risk rules. And, as is usual in any discussion of regulatory capital, FDIC Vice Chairman Hoenig today made it clear that he intends to use this comment process also to press for his preferred leverage ratio (LR).
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