In its final iteration of its ABCP risk-based capital guidelines, the Federal Deposit Insurance Corp. lowered the eligible liquidity conversion factor to 10% from the 20% it proposed last fall. Industry pundits were pushing for 7%. Also, the FDIC has decided not to include final guidance on capital against securitized revolving credits with early amortization provisions (such as credit cards), but will readdress this issue through the implementation of Basel II.
A final draft of the rules was circulated during a discussion in Washington last Monday. The rest of the U.S. regulators, collectively the Federal Financial Institutions Examination Council (FFIEC), are expected to follow course. The rules, which have yet to be published to the Federal Register, will take effect Sept. 30.