Request for Comment on Proposed Retail Credit Risk Guidance - District Notice 04-83 - Dallas Fed

Federal Reserve Bank of Dallas2200 N. PEARL ST.DALLAS, TX 75201-2272November 26, 2004Notice 04-83TO: The Chief Executive Officer of eachfinancial institution and others concernedin the Eleventh Federal Reserve DistrictSUBJECTRequest for Comment on Proposed Retail Credit Risk GuidanceDETAILSThe OCC, Federal Reserve Board, FDIC, and OTS have published for industrycomment a document that sets forth proposed supervisory guidance for banks, savingsassociations, and bank holding companies that would use the internal-ratings-based (IRB)approach to determine their regulatory capital requirements for retail credit exposures. Theagencies described the IRB approach in general terms in an advance notice of proposedrulemaking (ANPR) in August 2003 and expect to issue a notice of proposed rulemaking (NPR)in 2005 that would comprehensively implement the IRB approach and other elements of theInternational Convergence of Capital Measurement and Capital Standards: A RevisedFramework, which was adopted by the Basel Committee on Banking Supervision in June 2004(Basel II Framework).Under the IRB approach, banking organizations would use internal estimates ofcertain risk parameters as key inputs in the determination of their regulatory capitalrequirements. The agencies intend for this guidance to provide banking organizations, inanticipation of the NPR, with a description of the current views of the agencies regarding (and anopportunity for interested persons to ...