Basel III Update: Federal Reserve Proposes New Bank Capital Framework
Yesterday, the Federal Reserve issued a much-awaited proposal to restructure current regulatory capital rules for U.S. banking organizations. The proposal would implement heightened international capital standards, known as Basel III, as well as certain changes required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. According to the Federal Reserve, the new framework “addresses shortcomings in regulatory capital requirements that became apparent during the recent financial crisis.”
The following memorandum provides a high-level summary of the proposal.