October 23, 2014
Federal Reserve Board releases supervisory scenarios for 2015 capital planning and stress testing
For release at 4:00 p.m. EDT
The Federal Reserve Board on Thursday issued the supervisory scenarios that will be used in the 2015 capital planning and stress testing program. The program includes the Comprehensive Capital Analysis and Review (CCAR) of 31 bank holding companies with $50 billion or more of total consolidated assets.
The aim of the annual reviews is to ensure that large financial institutions have robust, forward-looking capital planning processes that account for their unique risks, and to help ensure that they have sufficient capital to continue operations throughout times of economic and financial stress. Capital is important to banking organizations, the financial system, and the economy broadly because it acts as a cushion to absorb losses and helps to ensure that losses are borne by shareholders, not taxpayers.
The Federal Reserve will require institutions to use the supervisory scenarios in both the stress tests conducted as part of the CCAR and in the stress tests that are part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Some companies that are not part of CCAR, including state member bank subsidiaries of CCAR participants and some companies with between $10 billion and $50 billion in assets, also will use the supervisory scenarios for Dodd-Frank Act stress tests.
The baseline, adverse, and severely adverse scenarios include 28 variables, including economic activity, unemployment, exchange rates, prices, incomes, and interest rates. The adverse and severely adverse scenarios describe hypothetical sets of events designed to assess the strength of banking organizations and their resilience to adverse economic environments. They are not forecasts. The baseline scenario follows a similar profile to the average projections from surveys of economic forecasters. It does not represent the forecast of the Federal Reserve.
The Federal Reserve is publishing a narrative that describes the general conditions in the scenarios and changes in the scenarios from previous years.
As in prior years, six bank holding companies with large trading operations will be required to factor in a global market shock as part of their scenarios. The Federal Reserve intends to provide the data for the global market shock scenario as soon as it is possible, but no later than December 1, 2014.
In addition, for the second consecutive year, eight bank holding companies with substantial trading or custodial operations will be required to incorporate a counterparty default scenario. All 31 of the companies in the CCAR in 2015 must submit their capital plans on or before January 5, 2015.
| Previous CCAR participants, also participants in 2015 | Participants new to CCAR in 2015 | Global market shock participants, 2015 | Counterparty default participants, 2015 |
|---|---|---|---|
|
Ally Financial Inc. American Express Company Bank of America Corporation The Bank of New York Mellon Corporation BB&T Corporation BBVA Compass Bancshares, Inc. BMO Financial Corp. Capital One Financial Corporation Citigroup Inc. Comerica Incorporated Discover Financial Services Fifth Third Bancorp The Goldman Sachs Group, Inc. HSBC North America Holdings Inc. Huntington Bancshares Incorporated JPMorgan Chase & Co. KeyCorp M&T Bank Corporation Morgan Stanley MUFG Americas Holdings Corporation Northern Trust Corporation The PNC Financial Services Group, Inc. RBS Citizens Financial Group, Inc. Regions Financial Corporation Santander Holdings USA, Inc. State Street Corporation SunTrust Banks, Inc. U.S. Bancorp Wells Fargo & Co. Zions Bancorporation |
Deutsche Bank Trust Corporation |
Bank of America Corporation Citigroup Inc. The Goldman Sachs Group, Inc. JPMorgan Chase & Co. Morgan Stanley Wells Fargo & Company |
Bank of America Corporation The Bank of New York Mellon Corporation Citigroup Inc. The Goldman Sachs Group, Inc. JPMorgan Chase & Co. Morgan Stanley State Street Corporation Wells Fargo & Company |
2015 Supervisory Scenarios for Annual Stress Tests Required under the Dodd-Frank Act Stress Testing Rules and the Capital Plan Rule (PDF) | HTML
2015 Macro Scenario Tables (Excel)
Related Information
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