12 CFR 206.2 – Definitions
As used in this part, unless the context requires otherwise:
Terms Used In 12 CFR 206.2
- Exposure: includes credit and liquidity risks, including operational risks, related to intraday and interday transactions. See 12 CFR 206.2
- National Bank: A bank that is subject to the supervision of the Comptroller of the Currency. The Office of the Comptroller of the Currency is a bureau of the U.S. Treasury Department. A national bank can be recognized because it must have "national" or "national association" in its name. Source: OCC
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- total capital: means total Tier 1 and Tier 2 capital as calculated under the standards of that country. See 12 CFR 206.2
(a) Bank means an insured depository institution, as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. § 1813), and includes an insured national bank, state bank, District bank, or savings association, and an insured branch of a foreign bank.
(b) Commonly-controlled correspondent means a correspondent that is commonly controlled with the bank and for which the bank is subject to liability under section 5(e) of the Federal Deposit Insurance Act. A correspondent is considered to be commonly controlled with the bank if:
(1) 25 percent or more of any class of voting securities of the bank and the correspondent are owned, directly or indirectly, by the same depository institution or company; or
(2) Either the bank or the correspondent owns 25 percent or more of any class of voting securities of the other.
(c) Correspondent means a U.S. depository institution or a foreign bank, as defined in this part, to which a bank has exposure, but does not include a commonly controlled correspondent.
(d) Exposure means the potential that an obligation will not be paid in a timely manner or in full. “Exposure” includes credit and liquidity risks, including operational risks, related to intraday and interday transactions.
(e) Foreign bank means an institution that: (1) Is organized under the laws of a country other than the United States;
(2) Engages in the business of banking;
(3) Is recognized as a bank by the bank supervisory or monetary authorities of the country of the bank’s organization;
(4) Receives deposits to a substantial extent in the regular course of business; and
(5) Has the power to accept demand deposits.
(f) Primary federal supervisor has the same meaning as the term “appropriate Federal banking agency” in section 3 of the Federal Deposit Insurance Act (12 U.S.C. § 1813).
(g) Total capital means the total of a bank’s Tier 1 and Tier 2 capital under the risk-based capital guidelines provided by the bank’s primary federal supervisor. For a qualifying community banking organization (as defined in § 217.12 of this chapter) that is subject to the community bank leverage ratio framework (as defined in § 217.12 of this chapter), total capital means the bank’s Tier 1 capital (as defined in § 217.2 of this chapter and calculated in accordance with § 217.12(b) of this chapter). For an insured branch of a foreign bank organized under the laws of a country that subscribes to the principles of the Basel Capital Accord, “total capital” means total Tier 1 and Tier 2 capital as calculated under the standards of that country. For an insured branch of a foreign bank organized under the laws of a country that does not subscribe to the principles of the Basel Capital Accord (Accord), “total capital” means total Tier 1 and Tier 2 capital as calculated under the provisions of the Accord.
(h) U.S. depository institution means a bank, as defined in § 206.2(a) of this part, other than an insured branch of a foreign bank.