{"data":{"id":"us/12-cfr-628.10","jurisdiction":"us","citation":"12 CFR 628.10","heading":"Minimum capital requirements.","body":"(a) Computation of regulatory capital ratios. A System institution's regulatory capital ratios are determined on the basis of the financial statements of the institution prepared in accordance with GAAP using average daily balances for the most recent 3 months.\n(b) Minimum capital requirements. A System institution must maintain the following minimum capital ratios:\n(1) A common equity tier 1 (CET1) capital ratio of 4.5 percent.\n(2) A tier 1 capital ratio of 6 percent.\n(3) A total capital ratio of 8 percent.\n(4) A tier 1 leverage ratio of 4 percent, of which at least 1.5 percent must be composed of URE and URE equivalents.\n(5) [Reserved]\n(6) A permanent capital ratio of 7 percent.\n(c) Capital ratio calculations. A System institution's regulatory capital ratios are as follows:\n(1) CET1 capital ratio. A System institution's CET1 capital ratio is the ratio of the System institution's CET1 capital to total risk-weighted assets;\n(2) Tier 1 capital ratio. A System institution's tier 1 capital ratio is the ratio of the System institution's tier 1 capital to total risk-weighted assets;\n(3) Total capital ratio. A System institution's total capital ratio is the ratio of the System institution's total (tier 1 and tier 2) capital to total risk-weighted assets; and\n(4) Tier 1 leverage ratio. (i) A System institution's leverage ratio is the ratio of the institution's tier 1 capital to the institution's average total consolidated assets as reported on the institution's Call Report net of deductions and adjustments from tier 1 capital under §§ 628.22(a), (b), and (c) and 628.23.\n(ii) To calculate the measure of URE and URE equivalents described in paragraph (b)(4) of this section, a System institution must adjust URE and URE equivalents to reflect all the deductions and adjustments required under § 628.22(a), (b), and (c), and must use the denominator of the tier 1 leverage ratio.\n(5) Permanent capital ratio. A System institution's permanent capital ratio is the ratio of the institution's permanent capital to its total risk-adjusted asset base as reported on the institution's Call Report, calculated in accordance with the regulations in part 615, subpart H, of this chapter.\n(d) [Reserved]\n(e) Capital adequacy. (1) Notwithstanding the minimum requirements in this part, a System institution must maintain capital commensurate with the level and nature of all risks to which the System institution is exposed. FCA may evaluate a System institution's capital adequacy and require the institution to maintain higher minimum regulatory capital ratios using the factors listed in § 615.5350 of this chapter.\n(2) A System institution must have a process for assessing its overall capital adequacy in relation to its risk profile and a comprehensive strategy for maintaining an appropriate level of capital under § 615.5200 of this chapter.","path":["Title 12—Banks and Banking","CHAPTER VI—FARM CREDIT ADMINISTRATION","SUBCHAPTER B—FARM CREDIT SYSTEM","PART 628—CAPITAL ADEQUACY OF SYSTEM INSTITUTIONS","Subpart B—Capital Ratio Requirements and Buffers"],"source_url":"https://www.ecfr.gov/api/versioner/v1/full/2026-08-25/title-12.xml","current_through":"2026-08-25","vintage":"","retrieved_at":"2026-08-27T02:24:16Z","sha256":"3b7299253eeb4135da90e1353f630bebfafb4d0095af6e37f555b654891cba84","source_id":"us-cfr","stale":true,"prev":"us/12-cfr-628.4-628.9","next":"us/12-cfr-628.11"},"notice":"GroundRules: Original legal text. Not legal advice."}