On September 17, the Federal Reserve Board released its hypothetical scenarios for a second round of bank stress tests. Earlier this year, the Board’s first round of stress tests found that large banks were well capitalized under a range of hypothetical events. An additional round of stress tests is being performed due to the continued uncertainty from the COVID event. Release.
On October 23, regulators released the economic scenarios that will be used by financial institutions with total assets of over $10 billion for stress tests required under Dodd-Frank. The baseline, adverse, and severely adverse scenarios include 28 variables that reflect economic activity, including unemployment, exchange rates, prices, income, interest rates, and other relevant parameters of the economy. Regulatory review will cover 31 companies that will have to submit their capital plans on or before January 5, 2015. Fed Release. FDIC Release.
On November 15, the FDIC and the Fed each released the economic scenarios that will be used by certain large financial institutions for the upcoming round of stress tests required under the Dodd-Frank Act. The scenarios include baseline, adverse, and severely adverse scenarios. FDIC Release. Fed Release.
On March 13, the Fed announced summary results of stress tests under the Comprehensive Capital and Analysis Review, a supervisory assessment by the Fed of the capital planning processes and capital adequacy of 19 large, complex bank holding companies. Fed Release. Methodology and Results.
On March 12, the Fed described its methodology for the stress tests in the 2012 Comprehensive Capital Analysis and Review. The supervisory stress scenario, which is not the Fed’s forecast for the economy, depicts a severe recession in the U.S., including a peak unemployment rate of 13%, a 50% drop in equity prices, and a 21% decline in housing prices. The results for the 19 bank holding companies that participated in the tests will be released on March 15. Fed Release.
On February 3, the FDIC requested comment on a notice of proposed rulemaking to implement Section 165(i)(2) of the Dodd-Frank Act which requires FDIC-insured state nonmember banks and FDIC-insured state-chartered savings associations with total consolidated assets of more than $10 billion to conduct annual stress tests. Comments must be submitted by March 23. This notice of proposed rulemaking is substantively similar to regulations proposed by the Fed and the OCC. FDIC Release. Notice of Proposed Rulemaking.
On January 24, the OCC requested comment on a notice of proposed rulemaking to implement Section 165(i)(2) of the Dodd-Frank Act, which would: (i) require national banks and Federal savings associations with consolidated assets of more than $10 billion to conduct annual stress tests and (ii) impose reporting and disclosure requirements. Comments must be submitted by March 26. OCC Release. Proposed Rule.
On January 17, the FDIC approved a notice of proposed rulemaking to implement Section 165(i)(2) of the Dodd-Frank Act, which would require FDIC-insured state nonmember banks and FDIC-insured state-chartered savings associations with consolidated assets of more than $10 billion to conduct annual capacity-adequacy stress tests. Comments must be submitted within 60 days of publication in the Federal Register. FDIC Release. Proposed Rule.
On March 10, the Financial Services Authority (FSA) published its Financial Risk Outlook and indicated that U.K. banks will be required to perform stricter stress tests in 2010. FSA Financial Risk Outlook.
On November 9, Treasury announced that the Capital Assistance Program, created to provide additional taxpayer support to financial institutions subject to stress tests under the Supervisory Capital Assessment Program, closed with no investments having been made. Treasury Release. Fed Release.
