The Federal Reserve proposed a rule Thursday that would allow certain banks to use unrealized gains from equity securities to meet some regulatory requirements.
If adopted, the proposal would allow federally and state-chartered banks that hold certain marketable securities, such as bond mutual funds, to count as much as 45 percent of the value of those unrealized gains toward meeting requirements for a type of risk-based capital.
The proposal is a joint effort by the four federal banking regulators: the Fed, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp. and the Office of Thrift Supervision. The FDIC issued the plan Sept. 16.
Banks must hold a certain amount of their assets, known as risk-based capital, in reserve to hedge against possible loan defaults and to counter market fluctuations.
The public has until Dec. 26 to comment on the proposal.
The Federal Reserve oversees the nation’s bank holding companies.
