Basel
ii in the United States of America
From the
Basel ii
Compliance Professionals Association (BCPA),
the largest association of Basel ii Professionals in the
world
Final Rule, USA
Risk-Based Capital Standards:
Advanced Capital Adequacy Framework
Basel II
Implicit support
Like the proposed rule, the final rule
sets forth the regulatory capital consequences if a bank provides support to
a securitization in excess of the bank’s predetermined
contractual obligation to provide credit support to the
securitization.
First, consistent with the general risk-based
capital rules,
a bank that provides
such implicit support must hold regulatory capital
against all of the underlying exposures associated with the securitization as if the
exposures had not been securitized, and must deduct from tier 1 capital any after-tax gain-on-sale
resulting from the securitization.
Second, the bank must disclose publicly
(i) that it
has provided implicit support to the securitization, and
(ii) the regulatory capital impact to
the bank of providing the implicit support.
The bank’s primary Federal supervisor also may
require the bank to hold regulatory capital against all the underlying exposures
associated with some or all the bank’s other securitizations as if the exposures had
not been securitized, and to deduct from tier 1 capital any after-tax gain-on-sale
resulting from such securitizations.
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