OCC and Fed Publish Final Basel III Capital Rules, with New Guidances

Last Friday, the OCC and the Board of Governors of the Federal Reserve published their joint final rule implementing the Basel III regulatory capital framework and related Dodd-Frank Act changes. The final rule, adopted in July by both agencies and the FDIC, sets the minimum regulatory capital requirements for all organizations. It includes a new common equity Tier 1 ratio of 4.5 percent of risk-weighted assets, raises the minimum Tier 1 capital ratio from 4 percent to 6 percent of risk-weighted assets, and sets a new conservation buffer of 2.5 percent of risk-weighted assets. The agencies, together with the FDIC, also have released a New Capital Rule Community Bank Guide to help community banks implement the new rule, and the OCC has released a separate Quick Reference Guide for Community Bankers.