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Saturday, November 21, 2009

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Home > Bank Resources > Bank Resources Publications > SRC Insights > 2009 > Second Quarter

SRC Insights: Second Quarter 2009

Emerging Issues Update

The following is an update to the article, "Emerging Issues Regarding Trust Preferred Securities," published in the First Quarter 2009 issue of SRC Insights.

On March 17, 2009, the Federal Reserve Board announced the adoption of a final rule that delays until March 31, 2011, the effective date of new limits on the inclusion of trust preferred securities and other restricted core capital elements in tier 1 capital of bank holding companies (BHCs). This action is being taken in light of continued stress in financial markets and the efforts of BHCs to increase their overall capital levels. These new limits were scheduled to take effect on March 31, 2009, pursuant to a final rule adopted by the Board on March 10, 2005 (70 Federal Register 11827). As a result of delaying implementation of the new limits and until the new effective date in 2011, all BHCs may include cumulative perpetual preferred stock and trust preferred securities in tier 1 capital up to 25 percent of total core capital elements.