Reform of the US capital framework

The U.S. federal banking supervisory agencies, the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board (FRB), and the Federal Deposit Insurance Corporation (FDIC), have published a proposal to reform the capital framework by modernizing the definition of capital and the calculation of risk-weighted assets (RWAs) through a category-based approach. The proposal combines a stronger expanded framework for larger banking organizations with a revised standardized framework for other institutions, aiming to improve risk sensitivity, consistency, comparability, and disclosure requirements.

Reform of the US capital framework

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Executive Summary

The proposal modernizes the capital framework through a category-based architecture. For Category I and II institutions, the prudential focus lies on the expanded approach, with greater granularity, less reliance on internal models, and a stronger market risk, counterparty risk, and credit valuation adjustment framework. For Category III institutions, the standardized approach remains the default framework, although an optional path to the expanded approach is introduced. For Category IV institutions, a revised standardized framework remains the main treatment, with the possibility to opt into the expanded approach. Overall, the reform revises the definition of capital, recalibrates the calculation of RWAs, changes the treatment of off-balance-sheet exposures, derivatives, securitizations, and credit risk mitigants, introduces revisions for equity and operational risk, and strengthens disclosure requirements and the inflation indexation of thresholds.

The public consultation period ends on June 18, 2026.

Main Content

The content of the technical note is structured into the following main sections:

• Category I and II. The proposal centers on the expanded approach, which becomes the main prudential framework for these institutions. The reform revises the definition of capital, replaces the deduction of MSAs with a uniform risk weight, introduces a more granular treatment for credit and counterparty risk, incorporates equity and operational risk into RWA calculations, and strengthens the market risk, CVA, and disclosure frameworks.
• Category III and IV. The proposal maintains the revised standardized approach as the default treatment, while allowing optional adoption of the expanded approach. The revised framework recalibrates capital, credit, off-balance-sheet items, mitigants, and securitizations, while opt-in to the expanded approach introduces a more granular treatment for credit, counterparty risk, equity, operational risk, and disclosure.

Download the technical note on the Reform of the US capital framework.