Dodd-Frank Act Mid-Cycle Stress Tests 2013: Summary Instructions
PrintDodd-Frank Act Mid-Cycle Stress Tests 2013: Summary Instructions
Under the Board’s rule implementing Dodd-Frank Act stress test requirements for bank holding companies (BHCs) with total consolidated assets of $50 billion or more and nonbank financial companies supervised by the Board (Dodd-Frank Act stress test rule for covered companies, or covered company rule), BHCs that participated in the 2009 Supervisory Capital Assessment Program are required to conduct a mid-cycle company-run stress test in 2013.1
The mid-cycle stress test must be conducted using data as of March 31, 2013, and be based on scenarios developed by the BHC. BHCs must report the stress test results to the Board no later than July 5, 2013. In addition, BHCs must publicly disclose a summary of the results in the period between September 15 and September 30, 2013.
Each BHC is required to publish a summary of the results of its stress tests conducted under its severely adverse scenario, which is intended to promote market discipline and facilitate an understanding of the financial conditions and risks of the companies. The mid-cycle stress tests are conducted by BHCs, and their public disclosure should reflect the BHCs’ own views of their capital adequacy under the scenarios that they develop and employ.2 The Federal Reserve will incorporate information from the companies' mid-cycle stress tests into its ongoing assessment of covered companies through the normal supervisory process. However, it is important to note that the mid-cycle company-run stress test is not being conducted under the Board's capital plan rule and is not part of the annual Comprehensive Capital Analysis and Review. Accordingly, the Board will not provide an objection or non-objection to a company's mid-cycle stress test. Furthermore, the Federal Reserve does not conduct a supervisory stress test to coincide with the mid-cycle company-run stress tests.
References
1. The 18 BHCs participating in the 2013 mid-cycle company-run stress tests are Ally Financial Inc.; American Express Company; Bank of America Corporation; The Bank of New York Mellon Corporation; BB&T Corporation; Capital One Financial Corporation; Citigroup Inc.; Fifth Third Bancorp; The Goldman Sachs Group, Inc.; JPMorgan Chase & Co.; Keycorp; Morgan Stanley; The PNC Financial Services Group, Inc.; Regions Financial Corporation; State Street Corporation; SunTrust Banks, Inc.; U.S. Bancorp; and Wells Fargo & Company. For more on the covered company rule see 12 CFR part 252, subpart G. Return to text
2. Companies should conduct their stress tests in accordance with the expectations and principles set forth in the "Supervisory Guidance on Stress Testing for Banking Organizations With More Than $10 Billion in Total Consolidated Assets," 77 FR 29458 (May 17, 2012). Return to text
