FR4200_Basel_III_R1442_20140331_omb_final

Supporting Statement for the
Risk Based Capital Standards: Advanced Capital Adequacy Framework
(FR 4200; OMB No. 7100-0313)
(Basel III Rule; Docket: R-1442)
Summary
The Board of Governors of the Federal Reserve System, under delegated authority
from the Office of Management and Budget (OMB), is extending, with revision, the
Risk-Based Capital Standards: Advanced Capital Adequacy Framework Information
Collection (FR 4200; OMB No. 7100-0313). The Paperwork Reduction Act (PRA)
classifies reporting, recordkeeping, or disclosure requirements of a regulation as an
“information collection.”1
The Federal Reserve is adopting a final rule that revises its risk-based and
leverage capital requirements for banking organizations.2 The final rule consolidates
three separate notices of proposed rulemaking that the Office of the Comptroller of the
Currency (OCC), Federal Reserve, and Federal Deposit Insurance Corporation (FDIC)
(the agencies) published in the Federal Register on August 30, 2012, with selected
changes.3 The final rule implements a revised definition of regulatory capital, a new
common equity tier 1 minimum capital requirement, a higher minimum tier 1 capital
requirement, and, for banking organizations subject to the advanced approaches riskbased capital rules, a supplementary leverage ratio that incorporates a broader set of
exposures in the denominator. The final rule incorporates these new requirements into
the agencies’ prompt corrective action framework. In addition, the final rule establishes
limits on a banking organization’s capital distributions and certain discretionary bonus
payments if the banking organization does not hold a specified amount of common equity
tier 1 capital in addition to the amount necessary to meet its minimum risk-based capital
requirements. Further, the final rule amends the methodologies for determining riskweighted assets for all banking organizations, and introduces disclosure requirements that
would apply to top-tier banking organizations domiciled in the United States with $50
billion or more in total assets. The final rule also adopts changes to the agencies’
regulatory capital requirements that meet the requirements of section 171 and section
939A of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank
Act).4
The final rule also codifies the agencies’ regulatory capital rules, which have
previously resided in various appendices to their respective regulations, into a
1

44 U.S.C. § 47501 et seq.
Banking organizations include national banks, state member banks, Federal savings associations, and toptier bank holding companies domiciled in the United States not subject to the Federal Reserve’s Small
Bank Holding Company Policy Statement (12 CFR part 225, appendix C)), as well as top-tier savings and
loan holding companies domiciled in the United States, except certain savings and loan holding companies
that are substantially engaged in insurance underwriting or commercial activities, as described in this
preamble.
3
(77 FR 52792, 52888, and 52978)
4
Pub. L. 111–203, 124 Stat. 1376, 1435–38 (2010).
2

harmonized integrated regulatory framework. In addition, the Federal Reserve is
amending the advanced approaches and market risk rules to apply to top-tier savings and
loan holding companies domiciled in the United States, except for certain savings and
loan holding companies that are substantially engaged in insurance underwriting or
commercial activities. The final rule is effective January 1, 2014, with mandatory
compliance January 1, 2014 for advanced approaches banking organizations that are not
savings and loan holding companies; January 1, 2015 for all other covered banking
organizations.
The final rule contains reporting,5 recordkeeping, and disclosure requirements
subject to PRA. The Federal Reserve is revising the FR 4200 to implement the
requirements and revising the respondent panel to add Savings and Loan Holding
Companies (SLHCs). See the Description of Information Collection section for a
detailed discussion of the revisions to the FR 4200. The Federal Reserve’s total annual
burden for this information collection is estimated to be 113,793 hours and would
increase by 300,193 hours to 413,986 hours for the financial institutions it supervises that
are subject to the final rule.
Background and Justification
Section 1831o(c) of the Federal Deposit Insurance Act requires each federal
banking agency to adopt a risk-based capital requirement, which is based on the prompt
corrective action framework in that section. The International Lending Supervision Act
of 1984 (ILSA), (12 U.S.C. § 3907(a)(1)), mandates that each federal banking agency
require banks to achieve and maintain adequate capital by establishing minimum levels of
capital or by other methods that the applicable federal banking agency may deem
appropriate. Section 908 of the ILSA, (12 U.S.C. §47907(b)(47)(C)), also directs the
Chairman of the Federal Reserve and the Secretary of the Treasury to encourage
governments, central banks, and regulatory authorities of other major banking countries
to work toward maintaining and, where appropriate, strengthening the capital bases of
banking institutions involved in international lending.
On December 7, 2007, the OCC, the Federal Reserve, the FDIC, and the Office of
Thrift Supervision issued the joint final rule (December 2007 final rule) titled Risk-Based
Capital Standards: Advanced Capital Adequacy Framework (rule) implementing a riskbased regulatory capital framework for institutions in the United States (72 FR 69288).
The rule was based on the June 2004 Basel Committee on Banking Supervision’s
document, “International Convergence of Capital Measurement and Capital Standards: A
Revised Framework” (New Accord). Along with the rule, each agency adopted the
information collection referred to above.

5

Reporting burden associated with this final rule will be incorporated into the Consolidated Reports of
Income and Condition for banks (FFIEC 031 and 041; OMB No. 7100-0036), the Financial Statements for
Bank Holding Companies (FR Y–9; OMB No. 7100–0128), and the Capital Assessments and Stress
Testing information collection (FR Y–14A/Q/M; OMB No. 7100–0341).

The December 2007 final rule implemented the New Accord in the United States
and builds on improvements to risk assessment approaches that a number of large banks
have adopted over the last two decades. In particular, the rule required banks to assign
risk parameters to exposures and provides specific risk-based capital formulas that are
used to transform these risk parameters into risk-based capital requirements. The
collection of information contained in the rule was necessary to ensure that the new riskbased regulatory capital framework is implemented in the United States in a safe and
sound manner.
Description of Information Collection
A bank is required to comply with the December 7, 2007 final rule if it meets
either of two independent threshold criteria: (i) consolidated total assets of $250 billion
or more, as reported on the most recent year-end regulatory reports; or (ii) consolidated
total on-balance sheet foreign exposure of $10 billion or more at the most recent yearend. To determine total on-balance sheet foreign exposure, a bank would sum its
adjusted cross-border claims, local country claims, and cross-border revaluation gains
(calculated in accordance with the Federal Financial Institutions Examination Council
(FFIEC) Country Exposure Report (FFIEC 009; OMB No. 7100-0035). Adjusted crossborder claims would equal total cross-border claims less claims with the head
office/guarantor located in another country, plus redistributed guaranteed amounts to the
country of head office/guarantor. A bank is also required to comply if it is a subsidiary of
another financial institution that uses the advanced approaches.
A BHC is required to comply with the rule if the BHC has: (i) consolidated total
assets (excluding assets held by an insurance underwriting subsidiary) of $250 billion or
more, as reported on the most recent year-end regulatory reports; (ii) consolidated total
on-balance sheet foreign exposure of $10 billion or more at the most recent year-end; or
(iii) a subsidiary depository institution that applies the advanced approaches. In addition,
banks and BHCs may voluntarily decide to adopt the framework. Currently fourteen toptier banking organizations meet these criteria and an additional five BHCs have indicated
that they are voluntarily adopting the framework.
The December 7, 2007 final rule requires respondents to adopt a written
implementation plan, update that plan for any mergers, obtain prior written approvals for
the use of certain approaches, and make certain public disclosures regarding its capital
ratios, their components, and information on implicit support provided to a securitization.
These requirements are described in Sections 21 through 247, 42, 44, 547, and 71 of the
December 7, 2007 final rule. Details of the requirements for each section are provided
below.
Written Implementation Plan (Sections 21, 22, and 23) - Sections 21 and 22
require that a respondent adopt a written implementation plan that addresses how it will
comply with the rule’s qualification requirements, including incorporation of a
comprehensive and sound planning and governance process to oversee the
implementation efforts. The respondent must also develop processes for assessing capital

adequacy in relation to an organization’s risk profile. It must have in place internal risk
rating and segmentation systems for wholesale and retail risk exposures, including
comprehensive risk parameter quantification processes and processes for annual reviews
and analyses of reference data to determine its relevance. It must document its process
for identifying, measuring, monitoring, controlling, and internally reporting operational
risk; verify the accurate and timely reporting of risk-based capital requirements; and
monitor, validate, and refine its advanced systems. Section 247 requires a respondent to
update its implementation plan after any mergers.
Prior Written Approvals (Sections 44 and 53) - Sections 44 and 547 require
prior written approval by supervisors. Section 44 describes the internal assessment
approach (IAA). Prior written approval is required for use of the IAA. A respondent
must review and update each internal credit assessment whenever new material is
available, but at least annually. It must validate its internal credit assessment process on
an ongoing basis. Section 53 outlines the internal models approach (IMA). Prior written
approval is required for use of the IMA.
Disclosures (Sections 42 and 71) - Section 42 requires a respondent to publicly
disclose that it has provided implicit support to a securitization and the regulatory capital
impact to the bank of providing such implicit support. Section 71 specifies that each
consolidated bank must publicly disclose its total and tier 1 risk-based capital ratios and
their components quarterly.
Basel III Revisions
The Basel III final rule applies to all insured banks and savings associations, toptier BHCs domiciled in the United States with more than $500 million in assets, and
SLHCs that are domiciled in the United States. Provisions of this final rule that apply to
these banking organizations include implementation of a new common equity tier 1
minimum capital requirement, a higher minimum tier 1 capital requirement, and, for
banking organizations subject to the advanced approaches capital rules, a supplementary
leverage ratio that incorporates a broader set of exposures. Additionally, consistent with
Basel III, the Federal Reserve is applying limits on a banking organization's capital
distributions and certain discretionary bonus payments if the banking organization does
not hold a specified "buffer" of common equity tier 1 capital in addition to the minimum
risk-based capital requirements. The revisions set forth in this final rule are consistent
with section 171 of the Dodd-Frank Act, which requires the agencies to establish
minimum risk-based and leverage capital requirements. The Federal Reserve is also
revising the prompt corrective action framework by incorporating the new regulatory
capital minimums and updating the definition of tangible common equity.
In general, the Advanced Approaches and Market Risk final rule applies to
institutions with $250 billion or more in consolidated assets or $10 billion or more in
foreign exposure, and the market risk rule applies to SLHCs with significant trading
activity. In the Advanced Approaches and Market Risk final rule, the Federal Reserve is
revising the advanced approaches risk-based capital rules consistent with Basel III and

other changes to the Basel Committee's capital standards. The Federal Reserve also is
revising the advanced approaches risk-based capital rules to be consistent with section
9479A and section 171 of the Dodd-Frank Act. Additionally, in this final rule, the
Federal Reserve is revising the advanced approaches and market risk capital rules that
apply to top-tier SLHCs domiciled in the United States, if stated thresholds for trading
activity are met.
In the Standardized Approach final rule, the Federal Reserve is revising and
harmonizing rules for calculating risk-weighted assets to enhance risk sensitivity and
address weaknesses identified over recent years, including by incorporating aspects of the
Basel II standardized framework, and alternatives to credit ratings, consistent with
section 9479A of the Dodd-Frank Act. The Federal Reserve is revising methods for
determining risk-weighted assets for residential mortgages, securitization exposures, and
counterparty credit risk. The Federal Reserve is also implementing disclosure
requirements that would apply to U.S. banking organizations with $50 billion or more in
total assets.
The final rule contains recordkeeping and disclosure requirements subject to the
PRA found in sections: _.3, _.22, _.35, _.37, _.41, _.42, _.62, _.63 (including tables 1
through 10), _.121 through _.124, _.132, _.141, _.142, _.153, __.171, _.173 (including
tables: 4, 5, 9, and 12).
Minimum Capital Ratios
Section .3(c) provides for termination and close-out netting across multiple types
of transactions or agreements if the bank obtains a written legal opinion verifying the
validity and enforceability of the agreement under certain circumstances and maintains
sufficient written documentation of this legal review.
Section .22(h)(2)(iii)(A) allows the use of a conservative estimate of the amount
of a bank’s investment in the capital of unconsolidated financial institutions held through
the index security with prior approval by the appropriate agency.
Standardized Approach
Section .35 sets forth requirements for cleared transactions. Section
_.35(b)(3)(i)(A) requires, for a cleared transaction with a qualified central counterparty
(QCCP), that a client bank apply a risk weight of 2 percent, provided that the collateral
posted by the bank to the QCCP is subject to certain arrangements and the client bank has
conducted a sufficient legal review (and maintains sufficient written documentation of
the legal review) to conclude with a well-founded basis that the arrangements, in the
event of a legal challenge, would be found to be legal, valid, binding and enforceable
under the law of the relevant jurisdictions.
Section .37 addresses requirements for collateralized transactions. Section
_.37(c)(4)(i)(E) requires that a bank have policies and procedures describing how it

determines the period of significant financial stress used to calculate its own internal
estimates for haircuts and be able to provide empirical support for the period used.
Section .41 addresses operational requirements for securitization exposures.
Section _.41(b)(3) would allow for synthetic securitizations a bank’s recognition, for
risk-based capital purposes, of a credit risk mitigant to hedge underlying exposures if
certain conditions are met, including the bank’s having obtained a well-reasoned opinion
from legal counsel that confirms the enforceability of the credit risk mitigant in all
relevant jurisdictions. Section _.41(c)(2)(i) would require that a bank support a
demonstration of its comprehensive understanding of a securitization exposure by
conducting and documenting an analysis of the risk characteristics of each securitization
exposure prior to its acquisition, taking into account a number of specified
considerations.
Section .42 addresses risk-weighted assets for securitization exposures. Section
_.42(e)(2) requires that a bank publicly disclose that is has provided implicit support to
the securitization and the risk-based capital impact to the bank of providing such implicit
support.
Section .62 sets forth disclosure requirements related to a bank’s capital
requirements. Section _.62(a) specifies a quarterly frequency for the disclosure of
information in the applicable tables set out in section 63 and, if a significant change
occurs, such that the most recent reported amounts are no longer reflective of the bank’s
capital adequacy and risk profile, section _.62(a) also would require the bank to disclose
as soon as practicable thereafter, a brief discussion of the change and its likely impact.
Section .62(a) allows for annual disclosure of qualitative information that typically does
not change each quarter, provided that any significant changes are disclosed in the
interim. Section .62(b) requires that a bank have a formal disclosure policy approved by
the board of directors that addresses its approach for determining the disclosures it
makes. The policy is required to address the associated internal controls and disclosure
controls and procedures. Section .62(c) requires a bank with total consolidated assets of
$50 billion or more that is not an advanced approaches bank, if it concludes that specific
commercial or financial information required to be disclosed under section _.62 is
exempt from disclosure by the agency under the Freedom of Information Act (5 U.S.C.
552), to disclose more general information about the subject matter of the requirement
and the reason the specific items of information have not been disclosed.
Section .63 sets forth disclosure requirements for banks with total consolidated
assets of $50 billion or more that are not advanced approaches banks. Section .63(a)
requires a bank to make the disclosures in Tables 1 through 10 to Section_.63 and in
section .63(b) for each of the last three years beginning on the effective date of the rule.
Section .63(b) requires quarterly disclosure of a bank’s common equity tier 1 capital,
additional tier 1 capital, tier 2 capital, tier 1 and total capital ratios, including the
regulatory capital elements and all the regulatory adjustments and deductions needed to
calculate the numerator of such ratios; total risk-weighted assets, including the different
regulatory adjustments and deductions needed to calculate total risk-weighted assets;

regulatory capital ratios during any transition periods, including a description of all the
regulatory capital elements and all regulatory adjustments and deductions needed to
calculate the numerator and denominator of each capital ratio during any transition
period; and a reconciliation of regulatory capital elements as they relate to its balance
sheet in any audited consolidated financial statements.
Tables 1 through 10 to Section_.63 Table 1 sets forth scope of application
qualitative and quantitative disclosure requirements; Table 2 sets forth capital structure
qualitative and quantitative disclosure requirements; Table 3 sets forth capital adequacy
qualitative and quantitative disclosure requirements; Table 4 sets forth capital
conservation buffer qualitative and quantitative disclosure requirements; Table 5 sets
forth general qualitative and quantitative disclosure requirements for credit risk; Table 6
sets forth general qualitative and quantitative disclosure requirements for counterparty
credit risk-related exposures; Table 7 sets forth qualitative and quantitative disclosure
requirements for credit risk mitigation; Table 8 sets forth qualitative and quantitative
disclosure requirements for securitizations; Table 9 sets forth qualitative and quantitative
disclosure requirements for equities not subject to Subpart F of the rule; and Table 10 sets
forth qualitative and quantitative disclosure requirements for interest rate risk for nontrading activities.
Advanced Approach
Sections .121 and .122 requires that an institution adopt a written implementation
plan that addresses how it will comply with the advanced capital adequacy framework's
qualification requirements, including incorporation of a comprehensive and sound
planning and governance process to oversee the implementation efforts. The institution
must also develop processes for assessing capital adequacy in relation to an
organization's risk profile. It must establish and maintain internal risk rating and
segmentation systems for wholesale and retail risk exposures, including comprehensive
risk parameter quantification processes and processes for annual reviews and analyses of
reference data to determine their relevance. It must document its process for identifying,
measuring, monitoring, controlling, and internally reporting operational risk; verify the
accurate and timely reporting of risk-based capital requirements; and monitor, validate,
and refine its advanced systems.
Section .123 sets forth ongoing qualification requirements that require an
institution to notify its Federal supervisor of changes to advance systems and requires
submission of a plan for returning to compliance with qualification requirements.
Section .124 requires an institution to notify its primary Federal supervisor when
it makes a material change to its advanced systems and to develop an implementation
plan after any mergers.
Section .132(b)(2)(iii)(A) Counterparty credit risk of repo-style transactions,
eligible margin loans, and OTC derivative contracts, Own internal estimates for haircuts.
With the prior written approval of the agency, an institution may calculate haircuts (Hs

and Hfx) using its own internal estimates of the volatilities of market prices and foreign
exchange rates. To receive Board approval to use its own internal estimates, an
institution must satisfy the minimum quantitative standards outlined in this section.
Section .132(b)(3) Counterparty credit risk of repo-style transactions, eligible
margin loans, and OTC derivative contracts, Simple VaR methodology. With the prior
written approval of the agency, an institution may estimate EAD for a netting set using a
VaR model that meets certain requirements.
Section .132(d)(1) allows the use of the internal models methodology to
determine EAD for counterparty credit risk for derivative contracts with prior written
approval. Section .132(d)(1)(iii) allows the use of the internal models methodology for
derivative contracts, eligible margin loans, and repo-style transactions subject to a
qualifying cross-product netting agreement with prior written approval.
Section .132(d)(2)(iv) Counterparty credit risk of repo-style transactions, eligible
margin loans, and OTC derivative contracts, Risk-weighted assets using IMM. Under the
IMM, an institution uses an internal model to estimate the expected exposure (EE) for a
netting set and then calculates EAD based on that EE. An institution must calculate two
EEs and two EADs (one stressed and one unstressed) for each netting as outlined in this
section.
Section .132(d)(3)(vi) Counterparty Credit Risk of Repo-style Transactions,
Eligible Margin Loans, and OTC Derivative Contracts. To obtain agency approval to
calculate the distributions of exposures upon which the EAD calculation is based, the
institution must demonstrate to the satisfaction of the agency that it has been using for at
least one year an internal model that broadly meets the minimum standards, with which
the institution must maintain compliance. The institution must have procedures to
identify, monitor, and control wrong-way risk throughout the life of an exposure. The
procedures must include stress testing and scenario analysis.
Section .132(d)(3)(viii) Counterparty Credit Risk of Repo-style Transactions,
Eligible Margin Loans, and OTC Derivative Contracts. When estimating model
parameters based on a stress period, the institution must use at least three years of
historical data that include a period of stress to the credit default spreads of the
institution’s counterparties. The institution must review the data set and update the data
as necessary, particularly for any material changes in its counterparties. The institution
must demonstrate at least quarterly that the stress period coincides with increased CDS or
other credit spreads of the institution’s counterparties. The institution must have
procedures to evaluate the effectiveness of its stress calibration that include a process for
using benchmark portfolios that are vulnerable to the same risk factors as the institution’s
portfolio. The agency may require the institution to modify its stress calibration to better
reflect actual historic losses of the portfolio.
Section .132(d)(3)(ix) Counterparty Credit Risk of Repo-style Transactions,
Eligible Margin Loans, and OTC Derivative Contracts. An institution must subject its

internal model to an initial validation and annual model review process. The model
review should consider whether the inputs and risk factors, as well as the model outputs,
are appropriate. As part of the model review process, the institution must have a back
testing program for its model that includes a process by which unacceptable model
performance will be determined and remedied.
Section .132(d)(3)(x) Counterparty Credit Risk of Repo-style Transactions,
Eligible Margin Loans, and OTC Derivative Contracts. An institution must have policies
for the measurement, management and control of collateral and margin amounts.
Section .132(d)(3)(xi) Counterparty Credit Risk of Repo-style Transactions,
Eligible Margin Loans, and OTC Derivative Contracts. An institution must have a
comprehensive stress testing program that captures all credit exposures to counterparties,
and incorporates stress testing of principal market risk factors and creditworthiness of
counterparties.
Section .141 Operational Criteria for Recognizing the Transfer of Risk. Section
.141(b)(3) requires a well-reasoned legal opinion confirming the enforceability of the
credit risk mitigant in all relevant jurisdictions. An institution must demonstrate its
comprehensive understanding of a securitization exposure under section .141(c)(1), for
each securitization exposure by conducting an analysis of the risk characteristics of a
securitization exposure prior to acquiring the exposure and document such analysis
within three business days after acquiring the exposure. Sections .141(c)(2)(i) and (ii)
require that institutions, on an on-going basis (no less frequently than quarterly),
evaluate, review, and update as appropriate the analysis required under this section for
each securitization exposure.
Section .142 outlines the capital treatment for securitization exposures. A bank
must disclose publicly that it has provided implicit support to the securitization and the
regulatory capital impact to the bank of providing such implicit support.
Section .153 outlines the Internal Models Approach (IMA). A bank must receive
prior written approval from its primary Federal supervisor before it can use IMA.
Section .171 specifies that each consolidated bank must publicly disclose its total
and tier 1 risk-based capital ratios and their components.
Section .173 Disclosures by Banks that are Advanced Approaches Banks. An
institution that is an advanced approaches bank must make the disclosures described in
Tables 1 through 12. The institution must make these disclosures publicly available for
each of the last three years (that is, twelve quarters) or such shorter period beginning on
the effective date of this subpart E.
Table 4 to Section_.173 Capital Conservation and Countercyclical Buffers: An
institution must comply with the qualitative and quantitative public disclosures outlined
in this table.

Table 5 to Section .173 Credit Risk: General Disclosures. An institution must
comply with the qualitative and quantitative public disclosures outlined in this table.
Table 9 to Section_.173 Securitization: An institution must comply with the
qualitative and quantitative public disclosures outlined in this table.
Table 12 to Section .173 Interest Rate Risk for Non-trading Activities: An
institution must comply with the qualitative and quantitative public disclosures outlined
in this table.
Time Schedule for Information Collection
This information collection contains recordkeeping and disclosure requirements,
as described above. The final rule is effective January 1, 2014, with mandatory
compliance January 1, 2014 for advanced approaches banking organizations that are not
savings and loan holding companies; January 1, 2015 for all other covered banking
organizations.
Sensitive Questions
This collection of information contains no questions of a sensitive nature, as
defined by OMB guidelines.
Consultation Outside the Agency and Discussion of Public Comments
On August 30, 2012, the agencies published three NPRMs in the Federal Register
(77 FR 52792, 52888, and 52978) requesting public comment. The comment period for
the NPRMs originally expired on September 7, 2012, however, was later extended until
October 22, 2012. Each agency received over 2,500 public comments on the proposals
from banking organizations, trade associations, supervisory authorities, consumer
advocacy groups, public officials (including members of the U.S. Congress), private
individuals, and other interested parties.
A total of nine comments were received concerning paperwork. Seven expressed
concern regarding the increase in paperwork resulting from the rule. They addressed the
concept of paperwork generally and not within the context of the PRA. One comment
addressed cost, competitiveness, and qualitative impact statements, and noted the lack of
cost estimates. It was unclear whether the commenter was referring to cost estimates for
regulatory burden, which are included in the preamble to the rule, or cost estimates
regarding the PRA burden, which are included in the submissions (information collection
requests) made to OMB by the agencies regarding the final rule. One commenter seemed
to indicate that the agencies’ burden estimates are overstated. The commenter stated that,
for their institution, the PRA burden will parallel that of interest rate risk (240 hours per
year). The agencies’ estimates far exceed that figure, so no change to the estimates
would be necessary. The agencies’ continue to believe that their estimates are reasonable

averages and are not overstated. For a detailed discussion of the comments received and
the agencies’ responses, please refer to the “Summary of General Comments on the Basel
III Notice of Proposed Rulemaking and on the Standardized Approach Notice of
Proposed Rulemaking; Overview of the Final Rule” section of the final rule Federal
Register (78 FR 62018) notice published October 11, 2013.
Legal Status
The Board's Legal Division has determined that the Federal Deposit Insurance
Act, 12 U.S.C. 1831o(c), the International Lending Supervision Act of 1983, 12 U.S.C.
3907(a)(1), the Federal Reserve Act, 12 U.S.C. 324, and the Bank Holding Company Act,
12 U.S.C. 1844(c) authorize the Board to require the information collection. If a
respondent considers the information to be trade secrets and/or privileged such
information could be withheld from the public under the authority of the Freedom of
Information Act, 5 U.S.C. 552(b)(4). Additionally, to the extent that such information
may be contained in an examination report such information maybe also be withheld
from the public, 5 U.S.C. 552 (b)(8).
Estimate of Respondent Burden
The total annual burden for the report is estimated to be 113,793 hours and would
increase to 413,986 hours with the proposed revisions, as shown in the burden table
below. The net increase of 300,193 hours is attributed to a change in the: 1) estimated
number of respondents subject to Basel III, 2) the number of record-keeping and
disclosure requirements implemented by Basel III, and 3) estimated average hours per
response for each requirement. The requirement tables below provide a detailed
breakdown of burden estimates for each requirement. These recordkeeping and
disclosure requirements represent 3.07 percent of total Federal Reserve System
paperwork burden.

PRA Burden Table
Current
Written Implementation Plan
Prior Written Approvals
Disclosures
Total
Proposed
Advanced Approach Ongoing
(Old Written Implementation Plan)
Advanced Approach Ongoing
(Old Prior Written Approvals)
Advanced Approach Ongoing
(Old Disclosures)
Minimum Capital Ratios
(Ongoing Recordkeeping)
Standardized Approach
(Ongoing Recordkeeping)
Standardized Approach
(One-time Recordkeeping)
Standardized Approach
(Ongoing Disclosure)
Standardized Approach
(One-time Disclosure)
Advanced Approach
(Ongoing Recordkeeping)
Advanced Approach
(One-time Recordkeeping)
Advanced Approach
(Ongoing Disclosure)
Advanced Approach
(One-time Disclosure)
Ongoing Sub-total
One-time Sub-total
Total
Net Change
Program Change Due to Agency
Discretion
Change Due to Adjustment in
Agency Estimate

Number
of
respondents

Estimated
annual
frequency

Estimated
hours per
response

Estimated
annual
burden hours

7
18
19

1
1
4

13,268
1,009
36.25

92,876
18,162
2,755
113,793

37

1

404.77

14,976

37

1

40

1,480

37

1

5.78

214

2,202

1

16

35,232

2,202

1

20

44,040

2,202

1

122

268,644

47

1

131.25

6,169

47

1

226.25

10,634

37

1

146

5,402

37

1

420

15,540

37

1

35

1,295

37

1

280

10,360
108,808
305,178
413,986
300,193
397,316
-97,123

The current annual cost to the public of this information collection is estimated to be
$5,678,271 and with the revisions would increase to $20,657,901.6
Estimate of Cost to the Federal Reserve System
Federal Reserve System supervision staff would review the written
implementation plans and prior approvals as part of their normal work assignments and
there would be no additional staffing costs.

6

Total cost to the public was estimated using the following formula: percent of staff time, multiplied by
annual burden hours, multiplied by hourly rate (30% Office & Administrative Support at $18, 45%
Financial Managers at $59, 15% Lawyers at $63, and 10% Chief Executives at $85). Hourly rate for each
occupational group are the (rounded) mean hourly wages from the Bureau of Labor and Statistics (BLS),
Occupational Employment and Wages 2012, www.bls.gov/news.release/ocwage.nr0.htm Occupations are
defined using the BLS Occupational Classification System, www.bls.gov/soc/