The Federal Financial Institutions Examination Council is expected to propose an overhaul of the first-quarter 1997 call report this week.
The new call report would be a mixed bag for banks. Regulators plan to reduce the level of capital that banks must hold against assets sold with recourse, however, the proposed call report also is expected to ask for more information.
"This will be a refinement and a modification to the existing call report, but I don't think bankers will necessarily see it as a streamlining," a banking agency official said.
The upcoming proposal is part of an effort by the bank and thrift regulators to switch from regulatory accounting principles to generally accepted accounting principles. Under RAP, a bank must continue to hold capital against the full amount of an asset sold with recourse, even if its risk of loss is limited to 10%.
Under the proposal, when banks would sell assets but retain some risk, the transaction could be reported as a sale. That means reserves would reflect only estimated losses, said Susan Krause, senior deputy comptroller for bank supervision policy at the Office of the Comptroller of the Currency.
"This would free up some of the capital that banks are currently required to have tied up," Ms. Krause said.
On the other hand, the proposed call report would ask banks for more information in some areas. For example, the new call reports would require banks to state the notional amount of credit derivatives they hold in their portfolio.
In addition, the proposed call report would require bankers to break out information on mortgage-related assets. Currently, these numbers are lumped together with other assets on the balance sheet. A bank also would have to report the notional amount of mortgage derivatives and structured notes held in its portfolio.
"This will help us improve our ability to monitor interest rate risk," said an agency official.
Staff at the agencies are still working on a related proposal to create one quarterly call report that all banks, thrifts, and their holding companies would submit. This single form is expected by first quarter 1998.