FDIC to Align Premiums Scheme with Basel Reform

WASHINGTON – The Federal Deposit Insurance Corp. on Tuesday proposed tailoring its insurance-pricing system to correspond with changes in capital requirements.

U.S. regulators finalized rules in 2013 and earlier this year that, among others things, implement general capital requirements required by the international Basel III accord and impose a tougher “leverage” ratio on large banks.

On Tuesday, the FDIC proposed several revisions to its complex risk-based pricing system – which uses capital strength as one of the factors to calculate a bank’s deposit insurance premium – to keep pace with the Basel reforms.

The proposal would introduce the new leverage ratio as one of the risk indicators used to set prices for large banks, as well as change the system’s more general capital measures to correspond with Basel capital levels. Moreover, the FDIC would revise a technical aspect for calculating premiums for custodial banks, and it would  adjust how counterparty exposures affect premiums for the most complex institutions. Banks will have 60 days to comment on the proposal.

“It’s important that the capital categories that we use for deposit insurance assessments appropriately reflect the changes in the capital rules to maintain consistency in risk measurement and not increase reporting burden for smaller banks,” FDIC Chairman Martin Gruenberg said at the agency’s board meeting.

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