General Guidance for Developing Differential Premium Systems

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October 31, 2011 Highly Complex Institution Scorecard Measures and Components Measure Weights Component Weights P Performance Score P.1 Weighted Average CAMELS Rating 100% 30% P.2 Ability to Withstand Asset-Related Stress: 50% Tier 1 Leverage Ratio 10% Concentration Measure* 35% Core Earnings/Average Quarter-End Total Assets 20% Credit Quality Measure and Market Risk Measure** 35% P.3 Ability to Withstand Funding-Related Stress: 20% Core Deposits/Total Liabilities 50% Balance Sheet Liquidity Ratio 30% Average Short-Term Funding/Average Total Assets 20% L Loss Severity Score L.1 Loss Severity Measure 100% *As in the scorecard for large institutions, this measure takes into account higher-risk assets relative to Tier 1 capital. However, the concentration measure for highly complex institutions considers the top 20 counterparty exposures to Tier 1 capital and reserves ratio and the largest counterparty exposure to Tier 1 capital and reserves ratio instead of the growth-adjusted portfolio concentrations measure. **In addition to a credit quality component, the highly complex institution scorecard includes a market risk measure that considers trading revenue volatility, market risk capital, and level 3 trading assets. Discretion to adjust assessment rates for large and complex institutions The FDIC can make limited adjustments to the scores of large and complex institutions based on quantitative or qualitative measures not adequately captured in the scorecards. In determining whether to make an adjustment, the FDIC consults with an institution’s primary federal regulator and, for state chartered institutions, state banking supervisor. 79
October 31, 2011 Assessment rate adjustments In addition, up to three possible adjustments can be applied to any sized institution's initial base assessment rate: (1) a decrease in rates for longterm unsecured debt, (2) an increase for institutions than hold long-term unsecured debt issued by another insured institution, and (3) an increase not to exceed 10 basis points for brokered deposits in excess of 10 percent of domestic deposits for non-Risk Category I institutions (and for large and complex institutions with CAMELS and capital ratings similar to institutions in the II, III, and IV risk categories). The table below shows initial base assessment rates, adjustments, and total base assessment rates, expressed as annual rates. Initial base assessment rate Unsecured debt adjustment** Brokered deposit adjustment TOTAL BASE ASSESSMENT RATE Initial and Total Base Assessment Rates* Risk Category I Risk Category II Risk Category III Risk Category IV Large and Highly Complex Institutions 5–9 14 23 35 5–35 (4.5)–0 (5)–0 (5)–0 (5)–0 (5)–0 …… 0–10 0–10 0–10 0–10 2.5–9 9-24 18-33 30-45 2.5–45 * Total base assessment rates do not include the depository institution debt adjustment. **The unsecured debt adjustment cannot exceed the lesser of 5 basis points or 50 percent of an insured depository institution’s initial base assessment rate. Treatment of new institutions New small institutions (defined as banks and thrifts federally insured for less than five years) in Risk Category I are assessed at the maximum initial base assessment rate applicable to Risk Category I institutions. Other new small institutions are assessed at the initial base assessment rate for their risk category. No new small institution in any risk category is subject to the unsecured debt adjustment. All new small institutions are subject to the depository institution debt adjustment. All new small institutions in Risk Categories II, III, and IV are subject to the brokered deposit adjustment. 80
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General Guidance for Developing Dif
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October 31, 2011 I. Executive Summa
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Page 49 and 50: Q1 Q2 Violations of prudential and
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Page 53 and 54: October 31, 2011 transparency, that
Page 55 and 56: October 31, 2011 Premium categories
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Page 69 and 70: October 31, 2011 • Premium Rates
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Page 91: October 31, 2011 ANNEX II Deposit i
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