FED delays adoption of a final rule in tier 1 capital of bank holding companies

Discussion in 'Wall St. News' started by ASusilovic, Mar 18, 2009.

  1. In Light of Continued Stress in Financial Markets….

    …….the Federal Reserve Board announced the adoption of a final rule that delays until March 31, 2011, the effective date of new limits on the inclusion of trust preferred securities and other restricted core capital elements in tier 1 capital of bank holding companies (BHCs).

    These new limits were scheduled to take effect on March 31, 2009, pursuant to a final rule adopted by the Board on March 10, 2005. The delay will further the Board’s efforts, as well as the efforts of the other Federal banking agencies and the U.S. Department of the Treasury, to respond to the current financial situation.

    As explained in further detail in the final rule, as a result of delaying implementation of the new limits and until the new effective date in 2011, all BHCs may include cumulative perpetual preferred stock and trust preferred securities in tier 1 capital up to 25 percent of total core capital elements.


    [​IMG]

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