BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C.  20551
			DIVISION OF BANKING SUPERVISION AND REGULATION
			SR 02-16 May 23, 2002

	TO THE  OFFICER IN CHARGE OF SUPERVISION AND APPROPRIATE SUPERVISORY AND EXAMINATION STAFF AT EACH FEDERAL RESERVE BANK AND TO BANKING ORGANIZATIONS SUPERVISED BY THE FEDERAL RESERVE SUBJECT:   Questions and Answers on the Capital Treatment of Recourse, Direct Credit Substitutes, and Residual Interests in Asset Securitizations                       On November 29, 2001, the Federal Reserve and the other federal banking agencies published a final rule on the Capital Treatment of Recourse, Direct Credit Substitutes, and Residual Interests in Asset Securitizations.1  Since the rule became effective on January 1, 2002, the industry has raised several questions with regard to the appropriate application of certain aspects of the rule.  In response, the federal banking agencies jointly developed the attached question-and-answer document that provides interpretive guidance on some of these issues.  Further guidance will be provided as necessary.                       This letter and the attached interpretations should be distributed to state member banks, bank holding companies, and foreign banks with U.S. offices supervised by the Federal Reserve, especially those that securitize assets.  If you have any questions regarding these interpretations or the final securitization rule, please contact Tom Boemio, Senior Supervisory Financial Analyst, (202/452-2982) or Anna Lee Hewko, Senior Financial Analyst, (202/530-6260).    Richard Spillenkothen Director   Attachment (591 KB PDF)   Note: 66 Fed. Reg. 59614 (November 29, 2001) was issued jointly by the Federal Reserve, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and Office of Thrift Supervision.  Return to text
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