Requests for Comment on the Proposed Implementation of the New Basel Capital Accord - District Notice

ll★KFederal Reserve Bank of Dallas2200 N. PEARL ST.DALLAS, TX 75201-2272August 18, 2003Notice 03-43TO: The Chief Executive Officer of eachfinancial institution and others concernedin the Eleventh Federal Reserve DistrictSUBJECTRequests for Comment on the Proposed Implementationof the New Basel Capital AccordDETAILSThe four federal bank and thrift regulatory agencies have requested comment on twointeragency documents related to the proposed implementation of the new Basel Capital Accordin the United States. Earlier this month, the agencies approved issuance of the two documents forpublic comment.The new Accord, which is being developed by the Basel Committee on BankingSupervision, builds on and, for certain banks, would replace the Basel Capital Accord of 1988,which is the framework for capital adequacy standards for large, internationally active banks andthe basis for the risk-based capital adequacy standards now in place for all U.S. banks and bankholding companies.The first document, an Advance Notice of Proposed Rulemaking, sets forth for publiccomment the agencies’ current views on a proposed framework for implementing the revisedCapital Accord in the United States. Under the proposal, internationally active banks meetingcertain criteria would be subject to the advanced internal ratings-based approach for credit riskand the advanced measurement approaches (AMA) for operational risk.The second document contains two sections. The first ...