FED to Temporarily Revise FR Y-14 Reports to Conduct Stressed Analysis
FED is proposing to temporarily revise the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes necessary to conduct stressed analysis in connection with the re-submission of capital plans, using data as of June 30, 2020. FED is proposing to revise and extend, for three years, the FR Y-14A/Q/M reports, thus allowing it to require firms to submit additional FR Y-14A and FR Y-14Q data in connection with any future re-submissions of their capital plans. Comments on this proposal must be submitted on or before November 16, 2020. The draft supporting statement and forms and instructions for FR Y-14 reports have been also published.
On June 25, 2020, FED notified certain large firms that they would be required to resubmit and update their capital plans later this year, for additional analysis by FED, as economic conditions evolve. This additional analysis will include the global market shock and the largest counterparty default, or LCPD, components. FED has temporarily revised the FR Y-14A/Q/M reports to collect an additional full or partial FR Y-14A submission that includes stressed largest counterparty default data submitted on FR Y-14A, Schedule A (Summary) as well as additional stressed counterparty data submitted on FR Y-14Q, Schedule L (Counterparty), both as of June 30, 2020.
The temporary revisions require the submission of data as of June 30, 2020 and all data associated with these temporary revisions are due to 45 calendar days following the publication of the scenarios. All data associated with these temporary revisions must be accompanied by an attestation signed by the chief financial officer or equivalent senior officer. Conducting additional analysis with data as of that date will enable FED to ensure that firms subject to the stress tests are adequately capitalized and able to withstand the economic effects of the COVID-19 pandemic.
If FED needs to conduct additional analysis in connection with the re-submission of the capital plans of firms in the future, FED would need certain data. Therefore, FED proposes to revise the FR Y-14A instructions to indicate that FED may require submission of the full or partial FR Y-14A report, including stressed data associated with the largest counterparty default, in connection with the re-submission of the capital plan of a firm. FED also proposes to revise the FR Y-14Q instructions to indicate that FED may require submission of stressed FR Y-14Q, Schedule L (Counterparty) data in connection with the re-submission of the capital plan of a firm.
Related Links
- Federal Register Notice
- Draft Supporting Statement (PDF)
- Draft Reporting Form FR Y-14A (PDF)
- Draft Reporting Instructions FR Y-14A (PDF)
- Draft Reporting Instructions FR Y-14Q (PDF)
- Reporting Form Updates
Comment Due Date: November 16, 2020
Keywords: Americas, US, Banking, COVID-19, Reporting, FR Y-14, Regulatory Capital, Stress Testing, Sensitivity Analysis, DFAST, FED
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Laurent Birade
Advises U.S. and Canadian financial institutions on risk and finance integration, CCAR/DFAST stress testing, IFRS9 and CECL credit loss reserving, and credit risk practices.
Related Articles
APRA Finalizes Guidance on Management of Climate Change Risks
The Australian Prudential Regulation Authority (APRA) released the final Prudential Practice Guide on management of climate change financial risks (CPG 229) for banks, insurers, and superannuation trustees.
European Council Adopts Position on Digital Finance Package Proposals
The European Council adopted its position on two proposals that are part of the digital finance package adopted by the European Commission in September 2020, with one of the proposals involving the regulation on markets in crypto-assets (MiCA) and the other involving the Digital Operational Resilience Act (DORA).
PRA Proposes Rulebook Changes; BoE Extends BEEDS Testing Window
The Prudential Regulation Authority (PRA) is proposing, via the consultation paper CP21/21, to apply group provisions in the Operational Resilience Part of the PRA Rulebook (relevant for the Capital Requirements Regulation or CRR firms) to holding companies.
EC Proposes New Measures Under Capital Markets Union Package
The European Commission (EC) has adopted a package of measures related to the Capital Markets Union.
EBA Publishes Standards to Calculate Risk-Weights of CIUs Under CRR
The European Banking Authority (EBA) published the final report on draft regulatory technical standards for the calculation of risk-weighted exposure amounts of collective investment undertakings or CIUs, in line with the Capital Requirements Regulation (CRR).
FED Outlines Lending Conditions and Supervisory Activities in H1 2021
The Board of Governors of the Federal Reserve System (FED) published a report that summarizes banking conditions in the United States, along with the supervisory and regulatory activities of FED.
APRA Expects Boards to Strengthen Ability to Oversee Cyber Resilience
The Australian Prudential Regulation Authority (APRA) recently completed two pilot initiatives in its 2020-2024 Cyber Security Strategy, which was published in November 2020.
FSB Updates List of Global Systemically Important Banks
The Basel Committee on Banking Supervision (BCBS) published further information related to its 2021 assessment of global systemically important banks (G-SIBs), with additional details to help understand the scoring methodology.
FASB Proposes Improvements to Credit Losses Standard
The Financial Accounting Standards Board (FASB) is consulting on an Accounting Standards Update and the associated taxonomy improvements for requirements on troubled debt restructurings and vintage disclosures under the credit losses standard (for financial instruments) topic 326.
US Agencies Issue Statement on Crypto-Asset Policy Initiatives
US Agencies issued a statement that summarizes the work undertaken during the interagency policy sprints focused on crypto-assets and provides a roadmap of future work related to crypto-assets.
