12 CFR §324.100

1. (a)Purpose. This subpart E establishes:
   1. (1)Minimum qualifying criteria for FDIC-supervised institutions using institution-specific internal risk measurement and management processes for calculating risk-based capital requirements; and
   2. (2)Methodologies for such FDIC-supervised institutions to calculate their total risk-weighted assets.
2. (b)Applicability.
   1. (1)This subpart applies to an FDIC-supervised institution that:
      1. (i)Is a subsidiary of a global systemically important BHC, as identified pursuant to 12 CFR 217.402;
      2. (ii)Is a Category II FDIC-supervised institution;
      3. (iii)Is a subsidiary of a depository institution that uses the advanced approaches pursuant to 12 CFR part 3, subpart E (OCC), 12 CFR part 217, subpart E (Board), or this subpart (FDIC) to calculate its risk-based capital requirements;
      4. (iv)Is a subsidiary of a bank holding company or savings and loan holding company that uses the advanced approaches pursuant to subpart E of 12 CFR part 217 to calculate its risk-based capital requirements; or
      5. (v)Elects to use this subpart to calculate its risk-based capital requirements.
   2. (2)A market risk FDIC-supervised institution must exclude from its calculation of risk-weighted assets under this subpart the risk-weighted asset amounts of all covered positions, as defined in subpart F of this part (except foreign exchange positions that are not trading positions, over-the-counter derivative positions, cleared transactions, and unsettled transactions).
3. (c)Principle of conservatism. Notwithstanding the requirements of this subpart, an FDIC-supervised institution may choose not to apply a provision of this subpart to one or more exposures provided that:
   1. (1)The FDIC-supervised institution can demonstrate on an ongoing basis to the satisfaction of the FDIC that not applying the provision would, in all circumstances, unambiguously generate a risk-based capital requirement for each such exposure greater than that which would otherwise be required under this subpart;
   2. (2)The FDIC-supervised institution appropriately manages the risk of each such exposure;
   3. (3)The FDIC-supervised institution notifies the FDIC in writing prior to applying this principle to each such exposure; and
   4. (4)The exposures to which the FDIC-supervised institution applies this principle are not, in the aggregate, material to the FDIC-supervised institution.