Basel III Risk-Based Capital Requirements

Summary

This practice note addresses risk-based capital requirements and related revisions to the prompt corrective action (PCA) framework in connection with regulatory capital adequacy requirements. In 2013, the Board of Governors of the Federal Reserve System (the Federal Reserve), the Office of the Comptroller of the Currency (the OCC), and the Federal Deposit Insurance Corporation (the FDIC) (collectively, the federal bank regulatory agencies) adopted amendments overhauling the U.S. regulatory capital rules. These rules, often referred to as the Basel III capital rules, implement capital-related aspects of the Basel III accord. The Basel III capital rules also incorporate several changes to U.S. capital rules required under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), 111 P.L. 203, including changes related to the Collins Amendment.