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Risk Weights Unaffected by Federal Debt Downgrade
By: Jennifer George
Jennifer George
Partner & National SEC Director
Audit
Springfield
417.831.7283
On August 5, 2011, the federal banking agencies released a joint statement saying that, despite Standard & Poor’s downgrade of the U.S. credit rating from AAA to AA+, banks’ regulatory treatment of government securities will be unaffected:
“For risk-based capital purposes, the risk weights for Treasury securities and other securities issued or guaranteed by the U.S. government, government agencies, and government-sponsored entities will not change. The treatment of Treasury securities and other securities issued or guaranteed by the U.S. government, government agencies, and government-sponsored entities under other federal banking agency regulations, including, for example, the Federal Reserve Board's Regulation W, will also be unaffected.”
For more on this guidance, contact your BKD advisor.
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