Orrick's "Proposed Regulatory Capital Standards Related to Adoption of FAS 166 and 167", which we saw mentioned in this week's Credit Suisse Asset Backed Commercial Paper Weekly Newsletter, discusses a recent bank regulators' release involving the "Consolidation of Asset-Backed Commercial Paper Programs. It says, "Beginning in 2010, FAS 166 and FAS 167 will require certain banking organizations1 to consolidate certain securitized assets that are currently excluded from these organizations' balance sheets.... The Proposed Rule would eliminate existing provisions in the risk-based capital rules that permit a banking organization that is required to consolidate under GAAP an ABCP program for which the banking organization acts as sponsor to exclude the consolidated ABCP program assets from risk-weighted assets and instead assess the risk-based capital requirement against any contractual exposures of the organization arising from such ABCP programs.... In light of the increased incidence of banking organizations providing non-contractual support to these programs, as well as general credit risk concerns, the Agencies have determined that continuing the exclusion of consolidated ABCP program assets from riskweighted assets is no longer justified." In other news, see U.S. News & World Report's "SEC Looks to Put Buck Back Together in Money Market Case" and press release "Reserve Yield Plus Fund Distributes $60 Million".
