Joint Agency Proposal to Amend Their Respective
Risk-Based Capital Standards

Comments Due October 15

To All State Member Banks and Bank Holding Companies in the Second Federal Reserve District, and Others Concerned:

Following is the text of a statement issued by the Board of Governors of the Federal Reserve System:

The Federal Reserve Board, along with the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision (Agencies), have requested comment on a proposal to amend the risk-based capital guidelines for banks and bank holding companies (banking organizations) regarding the treatment of collateralized transactions.

Comment is requested by October 15, 1996.

The proposal would make uniform the Agencies' currently differing treatments for transactions supported by qualifying collateral and would implement part of section 303 of the Riegle Community Development and Regulatory Improvement Act of 1994, which requires the Agencies to work jointly to make uniform their rules implementing common supervisory policies.

The proposal also would permit institutions to apply a zero percent risk weight to portions of transactions that are collateralized in accordance with the provisions of the proposal.

The text of the proposal, as published in the of August 16 is available. Comments thereon should be submitted by October 15, 1996, and may be sent to the Board of Governors or to the appropriate regulatory agency, as specified in the notice, or, at this Bank, to Kausar Hamdani, Assistant Vice President.

William J. McDonough
President