In addition, the Federal Reserve and the Treasury have jointly announced a facility – expected to be operational shortly – that will lend against AAA-rated asset-backed securities collateralized by recently originated student loans, auto loans, credit card loans, and loans guaranteed by the Small Business Administration. Unlike our other lending programs, this facility combines Federal Reserve liquidity with capital provided by the Treasury.
As the recent Financial Stability Report of RBI issued last month points out, only three commercial banks have applied for the advanced approach for market risk as opposed to 15 banks who have applied for migrating to IRB approach for calculation of credit risk capital and 9 banks for migrating to AMA for calculation of operational risk capital charge.