Agreed proposal of the US Federal Banking Supervisory Authorities and the BoE

Quarterly Bulletin 1987 Q1
Published on 01 March 1987

The share economy: aspects of employee remuneration and participation Consultative paper issued by the Bank of England and the Board of Governors of the Federal Reserve System on 8 January 1987.

This paper constitutes a system for the measurement of capital adequacy agreed by the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation and the Bank of England. The principal objective of the paper is to promote the convergence of supervisory policies on capital adequacy assessments among countries with major banking centres. The proposal outlined below is intended to serve as a basis for consultation with the banking industry and others in the United States and the United Kingdom. The authorities concerned hope that the approach adopted by the United States and the United Kingdom will provide a basis which other countries can follow.

This paper explains the agreed proposal concerning:

  • the components of the primary capital base of banking organisations;

  • the deductions to be made from primary capital in computing the capital base for the calculation of a risk asset ratio;

  • the weighting structure of risk assets and off-balance-sheet activities;

  • the use for supervisory purposes of a ratio of primary capital to weighted risk assets.

  • The paper should be read in conjunction with the attached tables which are appropriately cross-referenced.

PDFAgreed proposal of the US Federal Banking Supervisory Authorities and the Bank of England on primary capital and capital adequacy assessment


Other Quarterly Bulletin 1987 Q1 articles

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