Notice of proposed rulemaking to implement Basel II risk-based capital requirements in the United States for large, internationally active banking organizations

Basel IIFederal Reserve Board (FRB)Risk Management

An interagency notice of proposed rulemaking (NPR) that would implement Basel II risk-based capital requirements in the United States for large, internationally active banking organizations was made public Thursday by the Federal Reserve Board.

The proposed rule would require the largest internationally active banks to enhance the measurement and management of their risks, including credit risk and operational risk. It also would require these banks to have rigorous processes for assessing overall capital adequacy in relation to their total risk profile and to publicly disclose information regarding their risk profile and capital adequacy.

"Given the increasing complexity of the activities at our largest banks, and the related risks of those activities, I fully support efforts to develop a more appropriately risk-sensitive capital framework for those institutions," said Board Chairman Ben S. Bernanke. "The current Basel I framework has become increasingly inadequate for capturing the risks at large, complex U.S. banking organizations."

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