Fed proposes tighter regulation on trust-preferred securities
The US Federal Reserve has proposed a rule to retain trust-preferred securities (TPS) in the tier-one capital of bank holding companies (BHC), but with stricter quantitative limits and clearer qualitative standards.
Internationally active BHCs would generally be expected to limit TPS to 15% of tier-one capital elements, net of goodwill, the Fed said.
The Federal Reserve said the proposal would strengthen the definition of regulatory capital by incorporating longstanding policies that are not explicitly set forth in its current capital guidelines. The proposal would not affect how BHCs account for TPS on their regulatory reports filed with the regulator, it added.
The Federal Reserve has requested public comment on the proposal by July 11.
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