What additional provisions are applicable to state member banks with financial subsidiaries?

CFR · 2024-01-01 · US · Title 12

(a) (1) The bank must not consolidate the assets and liabilities of any financial subsidiary with those of the bank. (2) For purposes of determining the bank's risk-based capital ratios under appendix A of this part, the bank must— (i) Deduct 50 percent of the aggregate amount of its outstanding equity investment (including retained earnings) in all financial subsidiaries from both the bank's Tier 1 capital and Tier 2 capital; and (ii) Deduct the entire amount of the bank's outstanding equity investment (including retained earnings) in all financial subsidiaries from the bank's risk-weighted assets. (3) For purposes of determining the bank's leverage capital ratio under appendix B of this part, the bank must— (i) Deduct 50 percent of the aggregate amount of its outstanding equity investment (including retained earnings) in all financial subsidiaries from the bank's Tier 1 capital; and (ii) Deduct the entire amount of the bank's outstanding equity investment (including retained earnings) in all financial subsidiaries from the bank's average total assets. (4) For purposes of determining the bank's ratio of tangible equity to total assets under § 208.43(b)(5), the bank must deduct the entire amount of the bank's outstanding equity investment (including retained earnings) in all financial subsidiaries from the bank's tangible equity and total assets. (5) If the deduction from Tier 2 capital required by paragraph (a)(2)(i) of this section exceeds the bank's Tier 2 capital, any exc

official document · source cfr-2024 · id 12:§ 208.73