Regulators Provide Small Banks Tool to Crunch Capital

WASHINGTON — Regulators released a tool on Tuesday that community banks can use to estimate how their capital matches up with new global standards.

The three banking agencies - the Federal Reserve Board, the Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency - provided smaller-sized institutions an initial calculator when the U.S. rules implementing Basel III were first proposed in June 2012.

The estimator was used to help banks assess the impact the new capital framework would have on firms.

Now that U.S. capital rules were finalized in July, regulators agreed to release a final version of the tool identical to the initial calculator.

In a press release, the agencies said the tool "may not precisely reflect banks' actual capital ratios under the framework."

They also alerted banks to the fact that the estimation tool requires "certain manual inputs that could have meaningful effects on results and should reference the revised capital framework when using the estimation tool."

Regulators have attempted to find ways to ease the regulatory burden on community banks as much as possible given their strong initial opposition to the global capital rules.