§ 324.100. Purpose, applicability, and principle of conservatism.
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/us/cfr/t12/s§ 324.100·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)Purpose. This subpart E establishes:
(1)Minimum qualifying criteria for FDIC-supervised institutions using institution-specific internal risk measurement and management processes for calculating risk-based capital requirements; and
(2)Methodologies for such FDIC-supervised institutions to calculate their total risk-weighted assets.
(b)Applicability.
(1)This subpart applies to an FDIC-supervised institution that:
(i)Is a subsidiary of a global systemically important BHC, as identified pursuant to 12 CFR 217.402;
(ii)Is a Category II FDIC-supervised institution;
(iii)Is a subsidiary of a depository institution that uses the advanced approaches pursuant to 12 CFR part 3, subpart E (OCC), 12 CFR part 217, subpart E (Board), or this subpart
(FDIC)to calculate its risk-based capital requirements;
(iv)Is a subsidiary of a bank holding company or savings and loan holding company that uses the advanced approaches pursuant to subpart E of 12 CFR part 217 to calculate its risk-based capital requirements; or
(v)Elects to use this subpart to calculate its risk-based capital requirements.
(2)A market risk FDIC-supervised institution must exclude from its calculation of risk-weighted assets under this subpart the risk-weighted asset amounts of all covered positions, as defined in subpart F of this part (except foreign exchange positions that are not trading positions, over-the-counter derivative positions, cleared transactions, and unsettled transactions).
(c)Principle of conservatism. Notwithstanding the requirements of this subpart, an FDIC-supervised institution may choose not to apply a provision of this subpart to one or more exposures provided that:
(1)The FDIC-supervised institution can demonstrate on an ongoing basis to the satisfaction of the FDIC that not applying the provision would, in all circumstances, unambiguously generate a risk-based capital requirement for each such exposure greater than that which would otherwise be required under this subpart;
(2)The FDIC-supervised institution appropriately manages the risk of each such exposure;
(3)The FDIC-supervised institution notifies the FDIC in writing prior to applying this principle to each such exposure; and
(4)The exposures to which the FDIC-supervised institution applies this principle are not, in the aggregate, material to the FDIC-supervised institution. [78 FR 55471, Sept. 10, 2013, as amended at 80 FR 41423, July 15, 2015; 84 FR 59279, Nov. 1, 2019]
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§ 324.100
Purpose, applicability, and principle of conservatism.
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