Details

  • Service: Advisory, Risk Consulting, Financial Risk Management
  • Industry: Banking & Capital Markets
  • Date: 1/8/2014

Regulatory Practice Letter #13-24 

Capital Planning and Stress Testing: Federal Reserve Board Policy Statement and Reporting
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The Federal Reserve Board (Federal Reserve) recently approved a final policy statement that establishes a framework to govern the agency’s approach to scenario design for the stress testing required in connection with its capital plan rule, more commonly referred to as the Comprehensive Capital Analysis and Review or CCAR, and to its Regulation YY requirements, which implement the supervisory and company run stress tests required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), more commonly referred to as DFAST. The policy statement became effective January 1, 2014.

 

On November 1, 2013 the Federal Reserve released the macroeconomic scenarios to be used in the 2014 stress testing exercises under the CCAR and DFAST. The Federal Reserve indicates these scenarios are consistent with the final policy.

 

Bank holding companies (BHCs) participating in the 2014 CCAR were required to submit their capital plans no later than January 6, 2014 along with Form FR-Y-14A, entitled Capital Assessments and Stress Testing, which also satisfies the reporting requirements for these BHCs under DFAST. The Form FR-Y-14A was also due by January 6, 2014.

 

On September 30, 2013 the Federal Reserve published a final notice of data collection activities for new Form FR-Y-16, entitled Annual Company Run Stress Test Projections, to be used by financial companies that are not covered by the CCAR but must conduct stress tests under DFAST. The Form FR-Y-16 is due to the Federal Reserve on March 31, 2014.