To mandate minimum leverage and risk-based capital requirements for insured depository institutions, depository institution holding companies, and nonbank financial companies that the Council identifies for Board of Governors supervision as subject to prudential standards.

SA 3879. Ms. COLLINS submitted an amendment intended to be proposed
to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself
and Mrs. Lincoln)) to the bill S. 3217, to promote the financial
stability of the United States by improving accountability and
transparency in the financial system, to end ``too big to fail,'' to
protect the American taxpayer by ending bailouts, to protect consumers
from abusive financial services practices, and for other purposes;
which was ordered to lie on the table; as follows:

At the appropriate place in title I, insert the following:

SEC. __. LEVERAGE AND RISK-BASED CAPITAL REQUIREMENTS.

(a) Definitions.--
(1) Generally applicable leverage capital requirements.--
The term ``generally applicable leverage capital
requirements'' means--
(A) the minimum ratios of tier 1 capital to average total
assets, as established by the appropriate Federal banking
agencies to apply to insured depository institutions under
the prompt corrective action regulations implementing section
38 of the Federal Deposit Insurance Act, regardless of total
consolidated asset size or foreign financial exposure; and
(B) includes the regulatory capital components in the
numerator of that capital requirement, average total assets
in the denominator of that capital requirement, and the
required ratio of the numerator to the denominator.
(2) Generally applicable risk-based capital requirements.--
The term ``generally applicable risk-based capital
requirements'' means--
(A) the risk-based capital requirements as established by
the appropriate Federal banking agencies to apply to insured
depository institutions under the agency's Prompt Corrective
Action regulations that implement section 38 of the Federal
Deposit Insurance Act, regardless of total consolidated asset
size or foreign financial exposure; and
(B) includes the regulatory capital components in the
numerator of those capital requirements, the risk-weighted
assets in the denominator of those capital requirements, and
the required ratio of the numerator to the denominator.
(b) Minimum Capital Requirements.--
(1) Minimum leverage capital requirements.--The appropriate
Federal banking agencies shall establish minimum leverage
capital requirements on a consolidated basis for insured
depository institutions, depository institution holding
companies, and nonbank financial companies identified under
section 113. The minimum leverage capital requirements
established under this paragraph shall not be less than the
generally applicable leverage capital requirements, which
shall serve as a floor for any

[[Page S3372]]

capital requirements the agency may require, nor
quantitatively lower than the generally applicable leverage
capital requirements that were in effect for insured
depository institutions as of the date of enactment of this
Act.
(2) Minimum risk-based capital requirements.--The
appropriate Federal banking agencies shall establish minimum
risk-based capital requirements on a consolidated basis for
insured depository institutions, depository institution
holding companies, and nonbank financial companies identified
under section 113. The minimum risk-based capital
requirements established under this paragraph shall not be
less than the generally applicable risk-based capital
requirements, which shall serve as a floor for any capital
requirements the agency may require, nor quantitatively lower
than the generally applicable risk-based capital requirements
that were in effect for insured depository institutions as of
the date of enactment of this Act.
(3) Capital requirements to address activities that pose
risks to the financial system.--
(A) In general.--Subject to the recommendations of the
Council, in accordance with section 120, the Federal banking
agencies shall develop capital requirements applicable to all
institutions covered by this section that address the risks
that the activities of such institutions pose, not only to
the institution engaging in the activity, but to other public
and private stakeholders in the event of adverse performance,
disruption, or failure of the institution or the activity.
(B) Content.--Such rules shall address, at a minimum, the
risks arising from--
(i) significant volumes of activity in derivatives,
securitized products purchased and sold, financial guarantees
purchased and sold, securities borrowing and lending, and
repurchase agreements and reverse repurchase agreements;
(ii) concentrations in assets for which the values
presented in financial reports are based on models rather
than historical cost or prices deriving from deep and liquid
2-way markets; and
(iii) concentrations in market share for any activity that
would substantially disrupt financial markets if the
institution is forced to unexpectedly cease the activity.
______