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In a letter to the Basel Committee The Clearing House identifies areas where the proposed revisions to the standardized approach for credit risk and capital floors should be modified to better achieve the Committee’s stated objectives of making the Standardized Approach more risk-sensitive, reducing reliance on external credit ratings and strengthening the comparability of risk-weighted asset calculations across jurisdictions.

TCHPC’s comment letter in response to the OCC, Fed and FDIC’s leverage ratio notice of proposed rulemaking letter is supportive of a properly formulated leverage ratio as a backstop to risk based capital measures but argues the proposal is premature as the Basel Committee is currently working on changes to the leverage ratio.

The Clearing House Association released a quantitative study on the Basel III supplemental leverage ratio (SLR) that finds that recent changes proposed by the Basel Committee – if combined with the U.S. proposal to raise the minimum leverage ratio to 5-6% for U.S. global systemically important banks (G-SIBs) – would make the leverage ratio the binding constraint for 67% of U.S. G-SIB assets.

The Clearing House Association submitted a comment letter and a study to the Basel Committee on the impacts of both the Basel and U.S. supplemental leverage ratio proposals on U.S. G-SIBs. The study finds that the U.S. and Basel proposals combined would establish the leverage ratio as a binding constraint.

TCHPC is broadly supportive of the proposed Basel III capital rules but has concerns with certain aspects that raise concerns for Owner Banks.