Super Finance Glossary
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Capital Forbearance
Capital Forbearance
Definition: The temporary permission for a bank or thrift to operate with capital levels below regulatory standards if the bank or thrift has adequate plans to restore capital. For example, banks suffering because of the energy and agricultural crises in the mid-1980s were permitted to operate with capital levels below regulatory standards if they had adequate plans to restore capital. A joint policy statement issued in March 1986 by the FDIC, the Office of the Comptroller of the Currency (OCC), and the Federal Reserve Board encouraged a capital forbearance program for agricultural banks.
Definition: The temporary permission for a bank or thrift to operate with capital levels below regulatory standards if the bank or thrift has adequate plans to restore capital. For example, banks suffering because of the energy and agricultural crises in the mid-1980s were permitted to operate with capital levels below regulatory standards if they had adequate plans to restore capital. A joint policy statement issued in March 1986 by the FDIC, the Office of the Comptroller of the Currency (OCC), and the Federal Reserve Board encouraged a capital forbearance program for agricultural banks.
