The Federal Deposit Insurance Corp. announced today that the four bank regulators -- itself, the Office of the Comptroller of the Currency, the Office of Thrift Supervision and the Board of Governors of the Federal Reserve -- have agreed to extend until July 1 the interim final rules for capital treatment of ABCP conduit assets.
The interim final rules exempt conduit assets/liabilities that are consolidated under FIN 46 from incurring risk-based capital charges. The rules also propose a 20% risk-weighting conversion factor for eligible conduit liquidity lines to ABCP conduits. The industry, meanwhile, is lobbying for a lower conversion factor. The American Securitization Forum, for example, is asking that the 20% factor be reduced to 7%.
The extension of the interim final rule is effective today, "as the agencies continue to work on developing a more risk-sensitive capital requirement for exposures to ABCP programs," the FDIC said in its announcement.
The FDIC had moved to have the rules extended early in April, following the original March 31 expiration.