U.S. Basel III Capital Requirements for Community Banks

With the recent issuance and approval of the U.S. Basel III final rule, all financial institutions must assess how these new capital requirements will affect them going forward.   The final rule represents the most comprehensive overhaul of U.S. bank capital standards since the U.S. adoption of Basel I in 1989.  Even though most community banks will not be subject to the market risk and advanced approaches capital rules, they still have to determine whether to elect the option to exclude Accumulated Other Comprehensive Income in tier 1 capital and assess the impact of the changes in asset risk weightings, revisions in Prompt Corrective Action capital thresholds, and capital conservation buffers.  The OCC New Capital Rule Quick Reference Guide for Community Banks is provided here. 

If you have any questions on how the final rule might affect your community bank, please contact John Griesbeck or Joseph Callicutt from our financial institution team at 901.682.2431.