Regulatory impact of consolidated variable interest entities.
The Office of the Comptroller of the Currency (OCC); Board of Governors of the Federal Reserve System (Board); Federal Deposit Insurance Corporation (FDIC); and the Office of Thrift Supervision (OTS) (collectively, the agencies) have finalized their capital guidelines for the impact of consolidation of asset backed entities.
Many regulated entities will consolidate securitization and similar entities as a result of the issuance of Financial Accounting Standard Board’s Statements of:
The general risk-based and advanced risk-based capital adequacy frameworks have been amended by adopting a final rule that:
The delay and subsequent phase-in periods only apply to the agencies’ risk-based capital requirements, not the leverage ratio requirement.
The rule will be effective 60 days after publication in the Federal Register (expected to be effective March 2010). Banking organizations include banks, savings associations, and bank holding companies (BHCs). FAS 166 and FAS 167 modified the accounting treatment under U.S. GAAP for most structured finance transactions involving a special purpose entity, and are effective for most entities for calendar 2010.