From the Regulators

The revisions are designed to correct and update certain important aspects of the rules that apply to large, internationally active banks

By James Langton |

U.S. banking regulators announced revisions to the capital rules that apply to the biggest banks on Tuesday in an effort to improve consistency with the global capital standards.

The U.S. regulators — including the U.S. Federal Reserve Board, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency — published a final set of amendments to the latest capital rules, which were adopted in July 2013.

The revisions are designed to correct and update certain aspects of the rules, including the calculation requirements for risk-weighted assets (RWAs) under so-called "advanced approaches" to calculating banks' capital requirements.

"Many of the changes enhance consistency of the advanced approaches with international capital standards," the regulators note. Since the global capital rules were overhauled in response to the financial crisis, global policy-makers and investors have expressed concerns that there's too much variation within the rules, particularly when it comes to calculating the capital requirements for RWAs.

The rules published on Tuesday only apply to large, internationally active banks that determine their regulatory capital ratios under the advanced approaches rule. These are banks that generally have at least US$250 billion in total consolidated assets or at least US$10 billion in total on-balance sheet foreign exposures.

The regulators first proposed these changes to the rules in December 2014, and the final rules will now take effect on Oct. 1.