Computation of regulatory capital ratios. A System institution's regulatory capital ratios are determined on the basis of the financial statements of the institution prepared in accordance with GAAP using average daily balances for the most recent 3 months.
Minimum capital requirements. A System institution must maintain the following minimum capital ratios:
A common equity tier 1 (CET1) capital ratio of 4.5 percent.
A tier 1 capital ratio of 6 percent.
A total capital ratio of 8 percent.
A tier 1 leverage ratio of 4 percent, of which at least 1.5 percent must be composed of URE and URE equivalents.
[Reserved]
A permanent capital ratio of 7 percent.
Capital ratio calculations. A System institution's regulatory capital ratios are as follows:
CET1 capital ratio. A System institution's CET1 capital ratio is the ratio of the System institution's CET1 capital to total risk-weighted assets;
Tier 1 capital ratio. A System institution's tier 1 capital ratio is the ratio of the System institution's tier 1 capital to total risk-weighted assets;
Total capital ratio. A System institution's total capital ratio is the ratio of the System institution's total (tier 1 and tier 2) capital to total risk-weighted assets; and
Tier 1 leverage ratio. A System institution's leverage ratio is the ratio of the institution's tier 1 capital to the institution's average total consolidated assets as reported on the institution's Call Report minus amounts deducted from tier 1 capital under §§ 628.22(a) and (c) and 628.23.
Permanent capital ratio. A System institution's permanent capital ratio is the ratio of the institution's permanent capital to its total risk-adjusted asset base as reported on the institution's Call Report, calculated in accordance with the regulations in part 615, subpart H, of this chapter.
[Reserved]
Capital adequacy. (1) Notwithstanding the minimum requirements in this part, a System institution must maintain capital commensurate with the level and nature of all risks to which the System institution is exposed. FCA may evaluate a System institution's capital adequacy and require the institution to maintain higher minimum regulatory capital ratios using the factors listed in § 615.5350 of this chapter.
A System institution must have a process for assessing its overall capital adequacy in relation to its risk profile and a comprehensive strategy for maintaining an appropriate level of capital under § 615.5200 of this chapter.
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