Banking Agencies' Statement Regarding The Basel Committee's Consultative Paper "Revisions to the Standardized Approach for Credit Risk"

The Basel Committee on Banking Supervision (BCBS) today published a consultative paper entitled “Revisions to the Standardized Approach for credit risk.”  These proposed revisions are intended to apply primarily to large, internationally active banking organizations and not community banking organizations.  A key objective of the paper is to seek comment on preliminary alternatives to internal models and external credit ratings for calculating risk-weighted assets.

The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency will consider the proposals outlined in the consultative paper with the goal of developing a stronger and more transparent risk-based capital framework for the largest institutions.  Any change to the U.S. risk-based capital rules as a result of proposals in this or subsequent papers released by the BCBS would be considered in a manner consistent with the U.S. notice and comment process.  Interested parties are encouraged to review the consultative paper and provide comments directly to the BCBS Secretariat.

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