Fed announces individual capital requirements for all large banks

Bank Regulatory Federal Issues Federal Reserve Capital Requirements

On August 4, the Federal Reserve Board announced the individual capital requirements for all large banks, which are in part determined by the Board’s stress test results that provide a risk-sensitive and forward-looking assessment of capital needs. According to the Fed, the total common equity tier 1 (CETI) capital requirement for each bank is made up of several components, including a minimum CET1 capital requirement for all banks of 4.5 percent; a stress capital buffer that is determined from the supervisory stress test results and is at least 2.5 percent; and, if applicable, a capital surcharge for global systemically important banks (G-SIB) of at least 1 percent. The requirements are effective October 1.