FED Releases Scenarios and Instructions for the 2018 CCAR and DFAST
FED released the scenarios that banks and supervisors will use for the 2018 Comprehensive Capital Analysis and Review (CCAR) and Dodd-Frank Act stress test exercises. FED also issued instructions to the firms participating in CCAR. Firms participating in CCAR are required to submit their capital plans and stress testing results to the FED on or before April 05, 2018. FED will announce the results of its supervisory stress tests by June 30, 2018, with the exact date to be announced later.
In 2018, 18 of the largest and most complex firms will be subject to both a quantitative evaluation of their capital adequacy and a qualitative evaluation of their capital planning capabilities. Additionally, 20 firms will only be subject to the quantitative portion of CCAR. The six foreign firms that are new to CCAR this year are Barclays US LLC, BNP Paribas USA, Inc., Credit Suisse Holdings (USA), DB USA Corporation, RBC USA Holdco Corporation, and UBS Americas Holdings LLC. To support the transition to stress testing for foreign firms that are new to the evaluation, the U.S. operations of these six foreign firms with significant trading activity will be subject to a simplified global market shock this year and the complete global market shock next year.
The stress tests run by the firms and the Board apply three scenarios: baseline, adverse, and severely adverse. For the 2018 cycle, the severely adverse scenario is characterized by a severe global recession in which the U.S. unemployment rate rises almost 6 percentage points to 10%, accompanied by a steepening Treasury yield curve. The adverse scenario features a moderate recession in the United States, in addition to weakening economic activity across all countries included in the scenario. As in prior years, six bank holding companies with large trading operations will be required to factor in a global market shock as part of their scenarios. Eight firms with substantial trading or processing operations will also be required to incorporate a counterparty default scenario.
Related Link: Press Release and Related Documents
Keywords: Americas, US, Banking, Stress Testing, CCAR, DFAST, FED
Previous Article
ESMA Announces Date for Issuing Results of CCP Stress Tests in EURelated Insights
|
News
EBA Finalizes Guidelines on the STS Criteria in SecuritizationEBA published the final guidelines that provide a harmonized interpretation of the criteria for a securitization to be eligible as simple, transparent, and standardized (STS) on a cross-sectoral basis throughout EU.
December 12, 2018
WebPage
Regulatory News
|
|
News
OSFI Sets Domestic Stability Buffer for D-SIBs at 1.75%OSFI set the level for the Domestic Stability Buffer at 1.75% of total risk-weighted assets, as calculated under the Capital Adequacy Requirements (CAR) Guideline.
December 12, 2018
WebPage
Regulatory News
|
|
News
FSI Publishes Paper on Proportionality in Insurance Solvency RulesFSI published a paper on proportionality in the application of insurance solvency requirements.
December 11, 2018
WebPage
Regulatory News
|
|
News
BCBS Updates Framework for Pillar 3 Disclosure RequirementsBCBS published the updated framework for Pillar 3 disclosure requirements.
December 11, 2018
WebPage
Regulatory News
|
|
News
EBA Issues Revised List of Validation Rules for ReportingEBA revised the list of validation rules in its implementing technical standards on supervisory reporting.
December 11, 2018
WebPage
Regulatory News
|
|
News
IMF Reports Assess the Stability of Financial System in BrazilIMF published a report on the results of the Financial System Stability Assessment (FSSA) on Brazil.
December 11, 2018
WebPage
Regulatory News
|
|
News
FED Governor Examines Pros of Imposing Capital Buffers on Large BanksAt the Peterson Institute for International Economics in Washington D.C., the FED Governor Lael Brainard summarized the financial stability outlook, highlighted areas where financial imbalances seem to be building, and touched on the related policy implications.
December 07, 2018
WebPage
Regulatory News
|
|
News
US Agencies Propose Rule on Appraisals for Real Estate TransactionsUS Agencies (FDIC, FED, and OCC) proposed a rule to increase the threshold level at or below which appraisals would not be required for the residential real estate transactions from USD 250,000 to USD 400,000. Comments will be accepted for 60 days from publication in the Federal Register.
December 07, 2018
WebPage
Regulatory News
|
|
News
EBA Single Rulebook Q&A: First Update for December 2018This week one answer was published as part of the Single Rulebook Questions and Answers (Q&A).
December 07, 2018
WebPage
Regulatory News
|
|
News
FED Updates Reporting Form and Instructions for FR Y-14QFED published the updated reporting form FR Y-14Q for Capital Assessment and Stress Testing, along with the associated instructions.
December 06, 2018
WebPage
Regulatory News
|
