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15 Cards in this Set
- Front
- Back
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What are the 5 purposes of Capital? |
Absorb Losses Promote public confidence Restrict excessive asset growth Protect depositors and the FDIC DIF Allow for adjustments in changing environments |
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What are the 3 components of Total Capital? |
Common Equity Tier 1 Capital Additional Tier 1 Capital Tier 2 Capital |
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What is a significant investment in the capital of an unconsolidated financial institution? |
All investments in the capital instruments of an unconsolidated financial institution where the bank owns more than 10% of the common stock of the unconsolidated financial institution. Note: When a bank owns a significant amount of common stock of a particular financial institution, all other investments in the capital instruments of that financial institution are also considered significant. |
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A non-significant investment in the capital of an unconsolidated financial institution refers to all investments in the capital instruments of unconsolidated financial institutions where the bank owns __ of the common stock of the unconsolidated financial institution (including situations in which the bank owns no common stock). |
10% or less Ex.) If a bank only owns noncumulative perpetual preferred stock in an unconsolidated financial institution, its investment is non-significant regardless of the amount of preferred stock owned. |
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What items on the balance sheet must be fully deducted from CET1 capital because they have limited ability to absorb losses? (BIGDs) |
Goodwill, net of associated DTLs Intangible assets, excluding MSAs, net of DTLs DTAs from net operating loss and tax credit carryforwards net of any related valuation allowances and DTLs Any gain-on-sale in connection with a securitization exposure that the bank has created and sold Net asset of a defined benefit pension plan when the plan is not owned by a depository institution, and if the plan is in a net asset position. |
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What threshold deductions is CET1 subject to? |
Non-significant investments in capital of unconsolidated financial institutions in form of common stock that exceed the 10% threshold for non-significant investments 10% individual and 15% aggregate CET1 capital threshold deduction for MSAs, DTAs related to temporary timing differences, and significant investments in common shares of unconsolidated financial institutions |
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What component of Total Capital is noncumulative perpetual preferred stock included in? |
Additional Tier 1 Capital |
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What component of Total capital is cumulative preferred stock included in? |
Tier 2 Capital |
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Credit conversion factor for unused commitments? |
Unconditionally cancelable: 0% Original maturity of one year or less: 20%
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Credit conversion factor for guarantees, repurchase agreements, securities lending and borrowing transactions, financial standby LOCs, forward agreements? |
100% |
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Credit conversion factor for performance bonds, bid bonds, warranties, performance standby letters of credit? |
50% |
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Risk weight for past due exposures? |
150% |
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Risk weight for residential mortgage exposures? |
50% if owner occupied, prudent underwriting standards, not 90 days or more past due/nonaccrual, not TDR. 100% for all others |
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Risk weight for government sponsored entities? |
20% |
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Exposures guaranteed by US government or agency |
If unconditionally guaranteed: 0% If conditional: 20% |
