1550.0120.1.28.2011

1550.0120.1.28.2011.doc

Advanced Capital Adequacy Framework Regulatory Reporting Requirements

OMB: 1550-0120

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Supporting Statement


Advanced Capital Adequacy Framework

Regulatory Reporting Requirements


FFIEC 101


[OMB Control No. 1550-0120]



A. Justification.


1. Circumstances that make the collection necessary:


The OTS is requesting renewal of approval from the Office of Management and Budget (OMB) to implement the Advanced Capital Adequacy Framework Regulatory Reporting Requirements (Federal Financial Institutions Examination Council (FFIEC) 101). The FFIEC1 approved implementation of new regulatory reporting requirements for banks that qualify for and adopt the Advanced Capital Adequacy Framework to calculate their risk-based capital requirement or are in the parallel run stage of qualifying to adopt the framework.


Once a savings association has adopted its implementation plan, it must complete a satisfactory parallel run before it may use the advanced approaches to calculate its risk-based capital requirements. The parallel run must be a period of at least four consecutive calendar quarters during which the bank meets all of the qualification requirements to the satisfaction of the OTS. During this period, the bank would continue to be subject to the general risk-based capital rules and would simultaneously calculate its risk-based capital ratios under the advanced approaches. The bank would report its risk-based capital ratios under both the general rules and the advanced approaches to the OCC through the supervisory process on a quarterly basis.


2. Use of the information:


The OTS uses the information to assess and monitor the levels and components of each bank’s risk-based capital requirements and the adequacy of the entity’s capital under the framework. The data allows the OTS to evaluate the quantitative impact and competitive implications of the framework on individual respondents and on the industry. The reporting schedules assist banks in understanding expectations surrounding the system development necessary for implementation and validation of the framework. The data submitted by banks that is releasable to the public provides information about banks’ risk-based capital. The data also serves to contribute to the on-site examination processes.


The information is collected using the form “FFIEC 101.” FFIEC 101 contains nineteen schedules, A through S, for banks to submit detailed data on the components of their capital and risk-weighted assets. Only Schedules A, B and S (Items 1-2 only) would be publicly available once a savings association has qualified to use the advanced approaches for regulatory capital purposes. Prior to qualification (i.e., parallel run), all information submitted by the respondents will be kept confidential.


Schedule A includes information about the components of Tier 1 capital, Tier 2 capital, and adjustments to regulatory capital as defined in the NPRM. Schedule B contains: summary information about risk-weighted assets by risk type; and, for credit risk exposures, outstanding balances and aggregated information about the drivers and estimates on which the calculation of risk-weighted assets are based. Schedule S, Items 1-2 contain high level information on operational risk capital.


This publicly available data is intended to provide market participants, depositors, supervisors, and the public with a sufficient level of detail about banks’ major capital and risk-weighted assets components and information about the composition of regulatory capital and the risk parameters on which risk-weighted asset calculations are based.


Schedules C-S outlines the main components of banks’ risk-weighted assets and are an expanded version of the summary data in Schedule B. Schedules C-J includes data items within the wholesale exposure category.


Schedules K-O is data items within the retail exposure category and each schedule represents a sub-portfolio of the retail exposure category as listed in Schedule B.


Schedules P and Q are data items within the securitization exposure class.


Schedule R provides: information about a bank’s equity exposures by type of exposure and by approach to measuring required capital; and information on equity exposures subject to specific weights and equity exposures to investment funds.


Schedule S provides data within the operational risk exposure class. The data items include details about historical operational losses for the reporting period and those used to model operational risk capital.


The purpose of the detailed reports for credit portfolios is to obtain information that broadly reflects risk segments within each portfolio. The reports would enable the OCC to conduct off-site assessment of banks’ regulatory capital calculations, perform trend analyses of capital changes, conduct peer analyses of capital and risk parameters, and direct the focus of on-site examination efforts.

3. Consideration of the use of improved information technology:


Any information technology that permits review by OTS examiners may be used.





4. Efforts to identify duplication:


The required information is unique and is not duplicative of any other information already collected.


There would, however, be a transition period during the parallel run where duplicative information would be produced for a limited period. This is necessary to implement the rule.


5. Methods used to minimize burden if the collection has a significant impact on a substantial number of small entities:


Not applicable. The collection does not have a significant impact on a substantial number of small entities.


6. Consequences to the Federal program if the collection were conducted less frequently:


The OTS would not be able to adequately monitor capital levels and ensure safety and soundness.


7. Special circumstances that would cause an information collection to be conducted in a manner inconsistent with 5 CFR Part 1320:


The information collection would be conducted in a manner consistent with 5 CFR Part 1320.


8. Efforts to consult with persons outside the agency:


On October 22, 2010, the agencies published the proposed reporting requirements for 60 days of comment (75 FR 65402). The OTS did not receive any comments.


9. Payment or gift to respondents:


None.


10. Any assurance of confidentiality:


The information would be kept confidential except as permitted to be disclosed by means of an exemption under the Freedom of Information Act. 5 U.S.C. § 552.


11. Justification for questions of a sensitive nature:


There are no questions of a sensitive nature.


12. Burden estimate:


Estimated Number of Respondents: 3 savings associations


Estimated Time per Response: 625 hours.


Estimated Total Annual Burden: 7,500 hours.



Cost of Hour Burden to Respondents:


The OTS estimates the cost of the hour burden to respondents as follows:


7, 500 x $100/hour (combination of various levels of staff) = $ 750,000.


Total Hour Burden Cost: $ 750,000


13. Estimate of total annual costs to respondents (excluding cost of hour burden in Item #12):


Not applicable.


14. Estimate of annualized costs to the Federal government:


Not applicable.


15. Change in burden:



The OTS is citing a decrease in the inventory burden of 5,000 hours due to a reduction in the number of respondents.


16. Information regarding collections whose results are to be published for statistical use:


The OTS has no plans to publish the information for statistical purposes.


17. Reasons for not displaying OMB approval expiration date:


The OTS is not requesting permission to not display the OMB approval expiration date.


18. Exceptions to the certification statement in Item 19 of OMB Form 83-I:


None.


B. Collections of Information Employing Statistical Methods.


Not applicable.



1 The OTS, OCC, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (Agencies) are members of the FFIEC.

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File TitleBASEL II – NOTICE OF PROPOSED RULEMAKING
AuthorAdministrator
Last Modified ByIra Mills
File Modified2011-01-29
File Created2011-01-28

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