OCC Seeks to Renew Information Collection on Stress Testing Guidance
OCC is proposing renewal of the information collection associated with the guidance on stress testing for banking organizations with more than USD 10 billion in total consolidated assets. OCC has sent the information collection (OMB Control No 1557-0312) to OMB for review. Comments must be submitted on or before October 18, 2018.
The guidance provides an overview of how a banking organization should structure its stress testing activities to ensure that those activities fit into the banking organization's overall risk management. The guidance outlines broad principles for a satisfactory stress testing framework and describes the manner in which stress testing should be used. While the guidance is not intended to provide detailed instructions for conducting stress testing for any particular risk or business area, it does describe several types of stress testing activities and how they may be most appropriately used by banking organizations.
In addition, although the guidance does not at present explicitly address the stress testing requirements imposed on certain companies by section 165(i) of the Dodd-Frank Act, the guidance will be revisited as part of the OCC's implementation of the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act, which amended the Dodd-Frank Act to raise the threshold for national banks subject to stress testing from USD 10 billion to USD 250 billion in total consolidated assets, reduce the number of stress test scenarios, and revise the annual stress test requirement to a periodic requirement. There was insufficient time to address changes needed to the guidance prior to completing this renewal.
Related Link: Federal Register Notice
Comment Due Date: October 18, 2018
Keywords: Americas, US, Banking, Stress Testing, EGRRCP Act, Dodd Frank Act, Information Collection, OCC
Featured Experts
James Partridge
Credit analytics expert helping clients understand, develop, and implement credit models for origination, monitoring, and regulatory reporting.
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.
Emil Lopez
Credit risk modeling advisor; IFRS 9 researcher; data quality and risk reporting manager
Related Articles
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
BIS Bulletin Examines Cognitive Limits of Large Language Models
The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.
ECB is Conducting First Cyber Risk Stress Test for Banks
As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.
EBA Continues Momentum Toward Strengthening Prudential Rules for Banks
A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.
EU and UK Agencies Issue Updates on Final Basel III Rules
The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards