Advanced approaches capital framework guidance up for revision, Fed invites comments

The Federal Reserve Board is inviting comment on a proposal to extend for three years, without revision, the Basel II Interagency Pillar 2 Supervisory Guidance (Pillar 2 Guidance), or the advanced approaches capital framework guidance. Comments will be due 60 days after the notice is published in the Federal Register, slated for Monday.

The advanced approaches capital framework requires certain banks and bank holding companies (BHCs) to use an internal ratings-based approach to calculate regulatory credit risk capital requirements and advance measurement approaches to calculate regulatory operational risk capital requirements. (The Fed notes that, due to the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018, its capital rule will not apply to institutions with total consolidated assets greater than or equal to $50 billion but less than $100 billion.)

Comments are invited on whether the information collected is necessary for the performance of the functions of the Fed Board; the accuracy of the associated burden estimates; ways to enhance the quality, utility, and clarity of the information to be collected; ways to minimize the burden on respondents (banks, BHCs); and estimates of capital or start-up costs of operation, maintenance, and purchase of services to provide information.

The Fed, in its notice for comment, estimates that 13 banking organizations will be providing this information, with each one spending an average of 420 hours per response. That adds up to an estimated annual burden of 5,460 hours.

Proposed Agency Information Collection Activities; Comment Request