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Financial Services Law Insights and Observations

Federal Reserve releases Comprehensive Capital Analysis and Review results

Federal Issues Federal Reserve CCAR Stress Test

Federal Issues

On June 27, the Federal Reserve (Fed) released the results of the Comprehensive Capital Analysis and Review (CCAR) conducted for 18 banking firms. The Fed considers quantitative and qualitative factors in its evaluation, including projected capital ratios under hypothetical severe economic conditions and the strength of the firm’s capital planning process, including its risk management, internal controls, and governance practices. The Fed did not object to the capital plans of any of the 18 firms, but did require one to address “limited weaknesses” the test identified. The Fed noted that, “On balance, virtually all firms are now meeting the Federal Reserve's capital planning expectations, which is an improvement from last year's assessment. The firms in the test have significantly increased their capital since the first round of stress tests in 2009.”

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