Regulatory Alerts2020-10-08 | 2020-19829Regulatory Capital Rule and Total Loss-Absorbing Capacity Rule: Eligible Retained Income
The OCC, Federal Reserve Board, and FDIC have adopted final rules revising the definition of eligible retained income under their capital and total loss-absorbing capacity (TLAC) regulations. By defining eligible retained income as the greater of four quarters' net income or its average, the agencies make automatic restrictions on capital distributions more gradual. This change supports continued lending and financial intermediation by preventing sudden, restrictive distribution limits during periods of economic stress.
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