Federal Reserve Adopts Final U.S. Bank Capital Standards Under Basel III
The Federal Reserve has approved a final rule implementing the revised capital standards under the international capital framework known as “Basel III.” The final rule represents the most significant development in U.S. bank capital regulation since the adoption of Basel I in 1989 and is clearly among the most important rulemakings since the passage of Dodd-Frank three years ago. It replaces the general risk-based capital rules of the different banking agencies that currently apply to banking organizations with a single integrated regulatory capital framework that emphasizes not only higher capital cushions for banks to absorb losses but also more stringent criteria for what qualifies as regulatory capital.