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TCH Seeks Risk-Based Capital Rules’ Clarifications

The Clearing House Association along with the ABA, IIF, ISBA and SIFMA submitted a comment letter to the FDIC, FRB and OCC in response to the agencies’ risk-based capital guidelines proposal. The comment letter addressed several critical concerns shared by a multitude of financial institutions and sought to clarify other important issues. Of particular note, the comment letter argues for: (i) removing the redundancies found throughout the proposal; (ii) ensuring that risk reduction and mitigation efforts are properly counted; (iii) aligning the regulatory framework with idiosyncratic and market risks that exist and (iv) clarifying where, how, and why the proposal departs from Basel II.5.