82 FR 60014 - Regulation Q; Regulatory Capital Rules: Risk-Based Capital Surcharges for Global Systemically Important Bank Holding Companies

FEDERAL RESERVE SYSTEM

Federal Register Volume 82, Issue 241 (December 18, 2017)

Page Range		60014-60015
FR Document		2017-27161

The Board is providing notice of the aggregate global indicator amounts for purposes of a calculation for 2017, which is required under the Board's rule regarding risk-based capital surcharges for global systemically important bank holding companies (GSIB surcharge rule).

Federal Register, Volume 82 Issue 241 (Monday, December 18, 2017)

[Federal Register Volume 82, Number 241 (Monday, December 18, 2017)]
[Notices]
[Pages 60014-60015]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-27161]


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FEDERAL RESERVE SYSTEM

[Docket No. R-1584]
RIN 7100 AE 89


Regulation Q; Regulatory Capital Rules: Risk-Based Capital 
Surcharges for Global Systemically Important Bank Holding Companies

AGENCY: Board of Governors of the Federal Reserve System (Board).

ACTION: Notice.

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SUMMARY: The Board is providing notice of the aggregate global 
indicator amounts for purposes of a calculation for 2017, which is 
required under the Board's rule regarding risk-based capital surcharges 
for global systemically important bank holding companies (GSIB 
surcharge rule).

DATES: Applicable: December 18, 2017.

FOR FURTHER INFORMATION CONTACT: Elizabeth MacDonald, Manager, (202) 
475-6316, or Holly Kirkpatrick, Supervisory Financial Analyst, (202) 
452-2796, Division of Supervision and Regulation; or Mark Buresh, 
Senior Attorney, (202) 452-5270, or Mary Watkins, Attorney, (202) 452-
3722, Legal Division. Board of Governors of the Federal Reserve System, 
20th and C Streets NW, Washington, DC 20551. For the hearing impaired 
only, Telecommunications Device for the Deaf (TDD) users may contact 
(202) 263-4869.

SUPPLEMENTARY INFORMATION: The Board's GSIB surcharge rule establishes 
a methodology to identify global systemically important bank holding 
companies in the United States (GSIBs) based on indicators that are 
correlated with systemic importance.\1\ Under the GSIB surcharge rule, 
a firm must calculate its GSIB score using a specific formula (Method 
1). Method 1 uses five equally weighted categories that are correlated 
with systemic importance--size, interconnectedness, cross-
jurisdictional activity, substitutability, and complexity--and 
subdivided into twelve systemic indicators. For each indicator, a firm 
divides its own measure of each systemic indicator by an aggregate 
global indicator amount. The firm's Method 1 score is the sum of its 
weighted systemic indicator scores expressed in basis points. The GSIB 
surcharge for the firm is then the higher of the GSIB surcharge 
determined under Method 1 and a second method that weights size, 
interconnectedness, cross-jurisdictional activity, complexity, and a 
measure of a firm's reliance on wholesale funding (instead of 
substitutability).\2\
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    \1\ See 12 CFR 217.402, 217.404.
    \2\ The second method (Method 2) uses similar inputs to those 
used in Method 1, but replaces the substitutability category with a 
measure of a firm's use of short-term wholesale funding. In 
addition, Method 2 is calibrated differently from Method 1.
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    The aggregate global indicator amounts used in the score 
calculation under Method 1 are based on data collected by the Basel 
Committee on Banking Supervision (BCBS). The BCBS amounts are 
determined based on the sum of the systemic indicator scores of the 75 
largest U.S. and foreign banking organizations as measured by the BCBS, 
and any other banking organization that the BCBS includes in its sample 
total for that year. The BCBS publicly releases these values, 
denominated in euros, each year. Pursuant to the GSIB surcharge rule, 
the Board publishes the aggregate global indicator amounts each year as 
denominated in U.S. dollars using the euro-dollar exchange rate 
provided by the BCBS.\3\ Specifically, the Board multiplied each of the 
euro-denominated indicator amounts made publicly available by the BCBS 
by

[[Page 60015]]

1.0541, which was the daily euro to U.S. dollar spot rate on December 
30, 2016, as published by the European Central Bank (available at 
http://www.ecb.europa.eu/stats/eurofxref/index.en.html).
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    \3\ 12 CFR 217.404(b)(1)(i)(B); 80 FR 49082, 49086-87 (August 
14, 2015). In addition, the Board maintains the GSIB Framework 
Denominators on its website, available at https://www.federalreserve.gov/bankinforeg/basel/denominators.htm.
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    The aggregate global indicator amounts for purposes of the 2017 
Method 1 score calculation under Sec.  217.404(b)(1)(i)(B) of the GSIB 
surcharge rule are:

                        Aggregate Global Indicator Amounts in U.S. Dollars (USD) for 2017
----------------------------------------------------------------------------------------------------------------
                                                                                     Aggregate global indicator
                    Category                             Systemic indicator                amount (in USD)
----------------------------------------------------------------------------------------------------------------
Size...........................................  Total exposures..................           $80,007,062,645,840
Interconnectedness.............................  Intra-financial system assets....             8,257,981,060,346
                                                 Intra-financial system                        9,326,026,596,609
                                                  liabilities.
                                                 Securities outstanding...........            14,058,608,335,249
Substitutability...............................  Payments activity................         2,273,665,800,113,670
                                                 Assets under custody.............           147,506,550,618,745
                                                 Underwritten transactions in debt             6,323,673,403,888
                                                  and equity markets.
Complexity.....................................  Notional amount of over-the-                559,101,108,830,245
                                                  counter (OTC) derivatives.
                                                 Trading and available-for-sale                3,628,156,457,081
                                                  (AFS) securities.
                                                 Level 3 assets...................               528,537,101,614
Cross-jurisdictional activity..................  Cross-jurisdictional claims......            19,688,183,709,288
                                                 Cross-jurisdictional liabilities.            17,261,218,426,372
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    Authority:  12 U.S.C. 248(a), 321-338a, 481-486, 1462a, 1467a, 
1818, 1828, 1831n, 1831o, 1831p-l, 1831w, 1835, 1844(b), 1851, 3904, 
3906-3909, 4808, 5365, 5368, 5371.

    By order of the Board of Governors of the Federal Reserve 
System, acting through the Director of the Division of Supervision 
and Regulation under delegated authority.
Ann E. Misback,
Secretary of the Board.
[FR Doc. 2017-27161 Filed 12-15-17; 8:45 am]
 BILLING CODE 6210-01-P

60014 Federal Register / Vol. 82, No. 241 / Monday, December 18, 2017 / Notices

Federal Deposit Insurance Corporation. and include in the subject line: P4–17 Streets NW, Washington, DC 20551. For
Robert E. Feldman, (Commenter/Company). Confidential the hearing impaired only,
Executive Secretary. filings should not be filed by email. A Telecommunications Device for the Deaf
[FR Doc. 2017–27158 Filed 12–15–17; 8:45 am] confidential filing must be filed with the (TDD) users may contact (202) 263–
BILLING CODE 6714–01–P
Secretary in hard copy only, and be 4869.
accompanied by a transmittal letter that SUPPLEMENTARY INFORMATION: The
identifies the filing as ‘‘Confidential- Board’s GSIB surcharge rule establishes
FEDERAL MARITIME COMMISSION Restricted’’ and describes the nature and a methodology to identify global
extent of the confidential treatment systemically important bank holding
[Petition No. P4–17] requested. The Commission will companies in the United States (GSIBs)
provide confidential treatment to the based on indicators that are correlated
Petition of SM Line Corporation for an extent allowed by law for confidential
Exemption; Notice of Filing and with systemic importance.1 Under the
submissions, or parts of submissions, for GSIB surcharge rule, a firm must
Request for Comments which confidentiality has been calculate its GSIB score using a specific
Notice is hereby given that SM Line requested. When a confidential filing is formula (Method 1). Method 1 uses five
Corporation (‘‘Petitioner’’), has submitted, there must also be submitted equally weighted categories that are
petitioned the Commission pursuant to a public version of the filing. Such correlated with systemic importance—
46 CFR 502.92, 502.94, and 530.13(b) for public filing version shall exclude size, interconnectedness, cross-
an exemption from the individual confidential materials, and shall jurisdictional activity, substitutability,
service contract amendments provision indicate on the cover page and on each and complexity—and subdivided into
of 46 CFR 530.10. affected page ‘‘Confidential materials twelve systemic indicators. For each
Petitioner states that it will soon excluded.’’ Public versions of indicator, a firm divides its own
merge with another Korean affiliated confidential filings may be submitted by measure of each systemic indicator by
corporation, Woobang E&C, and that the email. The Petition will be posted on an aggregate global indicator amount.
‘‘merger will include about 769 service the Commission’s website at http:// The firm’s Method 1 score is the sum of
contracts.’’ The Petitioner speculates the www.fmc.gov/P4-17. Replies filed in its weighted systemic indicator scores
merger will occur ‘‘on or about January response to the Petition will also be expressed in basis points. The GSIB
12, 2018 . . .’’ Petitioner states that both posted on the Commission’s website at surcharge for the firm is then the higher
itself and Woobang E&C will be ‘‘. . . this location. of the GSIB surcharge determined under
jointly and severally liable, so the Rachel E. Dickon, Method 1 and a second method that
current corporation guarantees the Assistant Secretary. weights size, interconnectedness, cross-
performance of the new corporation, jurisdictional activity, complexity, and a
[FR Doc. 2017–27135 Filed 12–15–17; 8:45 am]
including its service contracts.’’ measure of a firm’s reliance on
BILLING CODE 6731–AA–P
Petitioner claims ‘‘[it] would be an wholesale funding (instead of
undue burden on [itself] and its shipper substitutability).2
customers to identify those contracts not The aggregate global indicator
assignable by notice and to prepare, sign FEDERAL RESERVE SYSTEM amounts used in the score calculation
and file many individual amendments.’’ [Docket No. R–1584] under Method 1 are based on data
Petitioner claims ‘‘there will be no collected by the Basel Committee on
RIN 7100 AE 89
reduction in competition, and the relief Banking Supervision (BCBS). The BCBS
will promote commerce by permitting Regulation Q; Regulatory Capital amounts are determined based on the
the orderly servicing of these service Rules: Risk-Based Capital Surcharges sum of the systemic indicator scores of
contracts.’’ for Global Systemically Important Bank the 75 largest U.S. and foreign banking
In order for the Commission to make Holding Companies organizations as measured by the BCBS,
a thorough evaluation of the exemption and any other banking organization that
requested in the Petition, pursuant to 46 AGENCY: Board of Governors of the the BCBS includes in its sample total for
CFR 502.92, 502.94, and 530.13(b), Federal Reserve System (Board). that year. The BCBS publicly releases
interested parties are requested to ACTION: Notice. these values, denominated in euros,
submit views or arguments in reply to each year. Pursuant to the GSIB
the Petition no later than January 2, SUMMARY: The Board is providing notice surcharge rule, the Board publishes the
2018. Replies shall be sent to the of the aggregate global indicator aggregate global indicator amounts each
Secretary by email to Secretary@fmc.gov amounts for purposes of a calculation year as denominated in U.S. dollars
or by mail to Federal Maritime for 2017, which is required under the using the euro-dollar exchange rate
Commission, 800 North Capitol Street Board’s rule regarding risk-based capital provided by the BCBS.3 Specifically, the
NW, Washington, DC 20573–0001, and surcharges for global systemically Board multiplied each of the euro-
replies shall be served on Petitioners’ important bank holding companies denominated indicator amounts made
counsels, Robert B. Yoshitomi, NIXON (GSIB surcharge rule). publicly available by the BCBS by
PEABODY LLP, 799 Ninth Street NW, DATES: Applicable: December 18, 2017.
Ste. 500, Washington, DC 20001, FOR FURTHER INFORMATION CONTACT: 1 See 12 CFR 217.402, 217.404.
ryoshitomi@nixonpeabody.com, and Elizabeth MacDonald, Manager, (202) 2 The second method (Method 2) uses similar
Eric C. Jeffrey, NIXON PEABODY LLP, 475–6316, or Holly Kirkpatrick, inputs to those used in Method 1, but replaces the
daltland on DSKBBV9HB2PROD with NOTICES

substitutability category with a measure of a firm’s
799 Ninth Street NW, Ste. 500, Supervisory Financial Analyst, (202) use of short-term wholesale funding. In addition,
Washington, DC 20001, ejeffrey@ 452–2796, Division of Supervision and Method 2 is calibrated differently from Method 1.
nixonpeabody.com. Regulation; or Mark Buresh, Senior 3 12 CFR 217.404(b)(1)(i)(B); 80 FR 49082, 49086–

Non-confidential filings may be Attorney, (202) 452–5270, or Mary 87 (August 14, 2015). In addition, the Board
maintains the GSIB Framework Denominators on its
submitted in hard copy to the Secretary Watkins, Attorney, (202) 452–3722, website, available at https://
at the above address or by email as a Legal Division. Board of Governors of www.federalreserve.gov/bankinforeg/basel/
PDF attachment to Secretary@fmc.gov the Federal Reserve System, 20th and C denominators.htm.

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Federal Register / Vol. 82, No. 241 / Monday, December 18, 2017 / Notices 60015

1.0541, which was the daily euro to U.S. www.ecb.europa.eu/stats/eurofxref/ Method 1 score calculation under
dollar spot rate on December 30, 2016, index.en.html). § 217.404(b)(1)(i)(B) of the GSIB
as published by the European Central The aggregate global indicator surcharge rule are:
Bank (available at http:// amounts for purposes of the 2017

AGGREGATE GLOBAL INDICATOR AMOUNTS IN U.S. DOLLARS (USD) FOR 2017
Aggregate global
Category Systemic indicator indicator amount
(in USD)

Size ................................................... Total exposures .......................................................................................... $80,007,062,645,840
Interconnectedness .......................... Intra-financial system assets ...................................................................... 8,257,981,060,346
Intra-financial system liabilities ................................................................... 9,326,026,596,609
Securities outstanding ................................................................................ 14,058,608,335,249
Substitutability .................................. Payments activity ........................................................................................ 2,273,665,800,113,670
Assets under custody ................................................................................. 147,506,550,618,745
Underwritten transactions in debt and equity markets ............................... 6,323,673,403,888
Complexity ........................................ Notional amount of over-the-counter (OTC) derivatives ............................ 559,101,108,830,245
Trading and available-for-sale (AFS) securities ......................................... 3,628,156,457,081
Level 3 assets ............................................................................................ 528,537,101,614
Cross-jurisdictional activity ............... Cross-jurisdictional claims .......................................................................... 19,688,183,709,288
Cross-jurisdictional liabilities ....................................................................... 17,261,218,426,372

Authority: 12 U.S.C. 248(a), 321–338a, 1. The Bruey Family Control Group, FEDERAL TRADE COMMISSION
481–486, 1462a, 1467a, 1818, 1828, 1831n, consisting of Paul and Marjorie Bruey,
1831o, 1831p–l, 1831w, 1835, 1844(b), 1851, Yorkshire, Ohio; Barbara and Roger Agency Information Collection
3904, 3906–3909, 4808, 5365, 5368, 5371. Activities; Submission for OMB
Kremer, Celina, Ohio; Beatrice and
By order of the Board of Governors of the Delbert Balster, Tipp City, Ohio; Beverly Review; Comment Request
Federal Reserve System, acting through the
and Dennis Balster, Vandalia, Ohio; AGENCY: Federal Trade Commission
Director of the Division of Supervision and
Regulation under delegated authority. Bridget and John Anthony, Cincinnati, (‘‘FTC’’ or ‘‘Commission’’).
Ohio; Elizabeth and Robert
Ann E. Misback, ACTION: Notice.
Poeppelman, Osgood, Ohio; and Eric
Secretary of the Board.
Eyink, Maria Stein, Ohio: to retain SUMMARY: The information collection
[FR Doc. 2017–27161 Filed 12–15–17; 8:45 am]
voting shares of OSB Bancorp, Inc., and requirements described below will be
BILLING CODE 6210–01–P
thereby indirectly retain shares of submitted to the Office of Management
Osgood State Bank, both of Osgood, and Budget (‘‘OMB’’) for review, as
FEDERAL RESERVE SYSTEM Ohio. required by the Paperwork Reduction
B. Federal Reserve Bank of Kansas Act (‘‘PRA’’). The FTC is seeking public
Change in Bank Control Notices; City (Dennis Denney, Assistant Vice comments on its proposal to extend for
Acquisitions of Shares of a Bank or President) 1 Memorial Drive, Kansas an additional three years its OMB
Bank Holding Company City, Missouri 64198–0001: clearance for the information collection
requirements contained in the
The notificants listed below have 1. Allison M. Grace, Wichita, Kansas, Commission’s Business Opportunity
applied under the Change in Bank and the Allison M. Grace Trust Rule (‘‘Rule’’). That clearance expires on
Control Act (12 U.S.C. 1817(j)) and Agreement dated April 7, 2005; to January 31, 2018.
§ 225.41 of the Board’s Regulation Y (12 acquire voting shares of Andover DATES: Comments must be submitted on
CFR 225.41) to acquire shares of a bank Financial Corporation, Andover,
or bank holding company. The factors or before January 17, 2018.
Kansas, and thereby indirectly acquire
that are considered in acting on the ADDRESSES: Interested parties may file a
shares of Andover State Bank, Andover,
notices are set forth in paragraph 7 of comment online or on paper, by
Kansas. following the instructions in the
the Act (12 U.S.C. 1817(j)(7)).
The notices are available for 2. Kathy Fowler, Memphis, Texas; to Request for Comment part of the
immediate inspection at the Federal retain voting shares of First Altus SUPPLEMENTARY INFORMATION section
Reserve Bank indicated. The notices Bancorp, Inc., and thereby retain shares below. Write ‘‘Business Opportunity
also will be available for inspection at of Frazer Bank, both of Altus, Rule Paperwork Comment, FTC File No.
the offices of the Board of Governors. Oklahoma. P114408’’ on your comment, and file
Interested persons may express their Board of Governors of the Federal Reserve
your comment online at https://
views in writing to the Reserve Bank System, December 13, 2017.
ftcpublic.commentworks.com/ftc/
indicated for that notice or to the offices BusinessOptionRulePRA2 by following
Ann E. Misback, the instructions on the web-based form.
of the Board of Governors. Comments
must be received not later than January Secretary of the Board. If you prefer to file your comment on
daltland on DSKBBV9HB2PROD with NOTICES

5, 2018. [FR Doc. 2017–27184 Filed 12–15–17; 8:45 am] paper, mail your comment to the
A. Federal Reserve Bank of Cleveland BILLING CODE P following address: Federal Trade
(Nadine Wallman, Vice President) 1455 Commission, Office of the Secretary,
East Sixth Street, Cleveland, Ohio 600 Pennsylvania Avenue NW, Suite
44101–2566. Comments can also CC–5610 (Annex J), Washington, DC
be sent electronically to 20580, or deliver your comment to the
Comments.applications@clev.frb.org: following address: Federal Trade

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Document Created: 2017-12-15 23:54:39
Document Modified: 2017-12-15 23:54:39

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Notice.
Dates		Applicable: December 18, 2017.
Contact		Elizabeth MacDonald, Manager, (202) 475-6316, or Holly Kirkpatrick, Supervisory Financial Analyst, (202) 452-2796, Division of Supervision and Regulation; or Mark Buresh, Senior Attorney, (202) 452-5270, or Mary Watkins, Attorney, (202) 452- 3722, Legal Division. Board of Governors of the Federal Reserve System, 20th and C Streets NW, Washington, DC 20551. For the hearing impaired only, Telecommunications Device for the Deaf (TDD) users may contact (202) 263-4869.
FR Citation		82 FR 60014