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Advanced Search About the Fed News & Events Monetary Policy Supervision & Regulation Payment Systems Economic Research Data Consumers & Communities Board of Governors of the Federal Reserve System The Federal Reserve, the central bank of the United States, provides the nation with a safe, flexible, and stable monetary and financial system. Home > News & Events > Press Releases Press Release June 07, 2012 Federal Reserve Board approves final rule to implement changes to market risk capital rule For immediate release Share The Federal Reserve Board on Thursday approved a final rule to implement changes to the market risk capital rule, which requires banking organizations with significant trading activities to adjust their capital requirements to better account for the market risks of those activities. The final rule implements certain revisions made by the Basel Committee on Banking Supervision to its market risk framework between 2005 and 2010. The final rule will better capture positions for which the market risk capital rule is appropriate, reduce procyclicality in market risk capital requirements, enhance sensitivity to risks that are not adequately captured by the current regulatory methodologies, and increase transparency through enhanced disclosures. The final rule does not include those aspects of the Basel Committee's market risk framework that rely on credit ratings. Instead, the final rule includes alternative standards of creditworthiness for determining specific risk capital requirements for certain debt and securitization positions. These standards are consistent with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act, under which all federal agencies must remove from their regulations references to, and requirements of reliance on, credit ratings. The final rule applies to bank holding companies and state-chartered banks that are members of the Federal Reserve System. Separately, on Thursday the Board proposed to apply the market risk capital rule to savings and loan holding companies that meet the thresholds described in the final rule. The final rule is effective January 1, 2013. Federal Register notice: PDF | HTML Comment: View Board Votes For media inquiries, call 202-452-2955. Last Update: June 07, 2012 BOARD OF GOVERNORS of the FEDERAL RESERVE SYSTEM About the Fed News & Events Monetary Policy Supervision & Regulation Payment Systems Economic Research Data Consumers & Communities Financial Stability TOOLS AND INFORMATION STAY CONNECTED Contact Publications Freedom of Information (FOIA) Office of Inspector General Budget & Performance | Audit No FEAR Act Español Website Policies | Privacy Program Accessibility BOARD OF GOVERNORS of the FEDERAL RESERVE SYSTEM 20th Street and Constitution Avenue N.W., Washington, DC 20551
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