§ 628.23 - Limit on inclusion of third-party capital in total (tier 1 and tier 2) capital.

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The combined amount of third-party capital instruments that a System institution may include in total (tier 1 and tier 2) capital is equal to the greater of the following:

The then existing limit, if any; or

The lesser of:

Forty percent of total capital, calculated by taking two thirds of the average of the previous 4 quarters of total capital reported on the institution's Call Report filed with the FCA, less any amounts of third-party capital reported in total capital; or

The average of the previous 4 quarters of CET1 capital reported on its Call Report filed with the FCA.

Treatment of assets that are deducted. A System institution must exclude from total risk-weighted assets any item deducted from regulatory capital under this section.