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 Articles
|
News
FSB to Evaluate Effects of Too-Big-To-Fail Reforms for Systemic BanksFSB is seeking feedback as part of its evaluation of the effects of the too-big-to-fail reforms for banks.
May 23, 2019
WebPage
Regulatory News
|
|
News
APRA Releases Minor Changes to Reporting Standards on SA-CCR for BanksAPRA released minor changes to the three reporting standards for the standardized approach for measuring counterparty credit risk exposures (SA-CCR).
May 22, 2019
WebPage
Regulatory News
|
|
News
APRA on Industry Self-Assessments into Governance and AccountabilityAPRA released an information paper analyzing the self-assessments performed by 36 of the country’s largest banks, insurers, and superannuation licensees in response to the final report on the Prudential Inquiry into the Commonwealth Bank of Australia (CBA).
May 22, 2019
WebPage
Regulatory News
|
|
News
PRA Consults on Maintenance of TMTP Under Solvency IIPRA published a consultation paper (CP11/19) that sets out its approach to update supervisory statement (SS6/16) on maintenance of the transitional measure on technical provisions (TMTP) under Solvency II.
May 22, 2019
WebPage
Regulatory News
|
|
News
APRA Proposes to Amend Guidance on Residential Mortgage LendingAPRA is consulting on revisions to the prudential practice guide APG 223 on residential mortgage lending in Australia.
May 21, 2019
WebPage
Regulatory News
|
|
News
IASB Proposes Improvements to IFRS 9 and IFRS 16IASB published the exposure draft ED 2019/2 that proposes amendments to four IFRS standards, including IFRS 9 on Financial Instruments and IFRS 16 on Leases.
May 21, 2019
WebPage
Regulatory News
|
|
News
Denis Beau of BDF on Supervisory Priorities for Climate-Change RisksDenis Beau, the First Deputy Governor of BDF, delivered opening remarks at the BCBS-BSCEE-FSI High-level Meeting for Europe on banking supervision.
May 21, 2019
WebPage
Regulatory News
|
|
News
ISDA CDM to be Deployed for UK Digital Regulatory Reporting PilotISDA announced deployment of the ISDA Common Domain Model (ISDA CDM 2.0) to support the UK FCA, BoE, and participating financial institutions in testing phase two of the Digital Regulatory Reporting pilot for derivatives.
May 21, 2019
WebPage
Regulatory News
|
|
News
MAS to Consolidate Regulation of Merchant Banks Under Banking ActMAS published a consultation paper that proposes to consolidate the regulation of merchant banks under the Banking Act and to move merchant banks to a licensing regime under the MAS Act.
May 21, 2019
WebPage
Regulatory News
|
|
News
ESAs Amend Technical Standards on Mapping of ECAIs Under CRRESAs published a second amendment to the implementing technical standards on the mapping of credit assessments of External Credit Assessment Institutions (ECAIs) for credit risk under the Capital Requirements Regulation (CRR).
May 20, 2019
WebPage
Regulatory News
|
