Banks’ Favorite New Strategy: Footnote 151
Fine print in rule lets banks hold less capital against certain derivatives; industry and regulators met in Washington this week to discuss use of the method
Banks hoping to lower the burden of new capital rules are turning to the fine print.
Specifically, they are turning to the 79th page of a 2013 document titled “Regulatory Capital Rules”and looking at footnote 151. That reference effectively lets banks hold less capital against shorter-term derivatives, and banks want to harness it to lessen the blow when they enter into longer-running contracts.
The full WSJ article is available here: http://www.wsj.com/articles/banks-favorite-new-strategy-footnote-151-1460055887
The text of Footnote 151 is available here: http://www.documentcloud.org/documents/2793352-2013-21653.html#document/p79/a287732