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TCH Comments on Agencies’ Basel III Proposed Capital Rules

The Clearing House Association filed a joint trade comment letter with the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (the “Agencies”) in response to the Basel III notices of proposed rulemaking. TCH is broadly supportive of U.S. Basel III rules as proposed by the Agencies, but believes some modifications or clarifications will further the objectives expressed in the NPRs. We agree that the Agencies should implement Basel III for U.S. banks in a manner that is consistent with international standards where feasible and commensurate with the actual risk posed to the financial institution. 

While TCH does not revisit provisions opposed in prior comment letters on which international regulators have already reached agreement, there are limited areas where certain aspects of the NPRs do raise particular substantive concerns for our members. Specifically, we are primarily concerned about elimination of the filter for income/loss reported in accumulated other comprehensive income, the treatment of residential mortgage exposures, the definition of “financial institution,” and the proliferation of capital ratios.