Requirements in CCAR 2018
In November 2011, the Board adopted a capital plan rule requiring firms with consolidated assets of $50 billion or more to submit annual capital plans to the Federal Reserve for review.9 In February 2017, the Federal Reserve amended the capital plan rule to remove large and noncomplex firms from the qualitative assessment of CCAR. For the CCAR 2018 exercise, the Federal Reserve issued instructions on February 1, 2018,10 sent a letter to firms defining the scope of the 2018 CCAR qualitative assessment on February 14, 2018, and received capital plans from participating firms on April 5, 2018. The CCAR program was impacted by the May 24, 2018, enactment of the EGRRCPA. As a result, the Board will not disclose the current CCAR results for BHCs with greater than or equal to $50 billion but less than $100 billion in total consolidated assets.
Under the capital plan rule, a subject firm must include in its annual capital plan an assessment of the expected uses and sources of capital over the planning horizon under expected and stressful conditions, a detailed description of the firm's processes for assessing capital adequacy, the firm's capital policy, and a discussion of any expected changes to the firm's business plan that are likely to have a material impact on the firm's capital adequacy or liquidity.11
As noted, the Board adopted a revised regulatory capital framework in 2013 to address shortcomings in capital requirements that became apparent during the financial crisis.12 The revisions were phased in from 2014 until 2018 and, generally, a firm must meet the regulatory capital requirements for each projected quarter of the planning horizon in CCAR in accordance with the capital requirements that will be in effect during that quarter.13 The bulk of the revised regulatory capital framework, including the supplementary leverage ratio for advanced approaches firms, became fully phased in in the first quarter of the CCAR 2018 projection horizon (the first quarter of 2018).14
References
9. See 12 CFR 225.8. Asset size is measured over the previous four calendar quarters as reported on the FR Y-9C regulatory report. If a firm has not filed the FR Y-9C for each of the four most recent consecutive quarters, average total consolidated assets means the average of the company's total consolidated assets, as reported on the company's FR Y-9C, for the most recent quarter or consecutive quarters. Return to text
10. See Board of Governors of the Federal Reserve System, Comprehensive Capital Analysis and Review 2018 Summary Instructions for LISCC and Large and Complex Firms (Washington: Board of Governors, February 2018), www.federalreserve.gov/newsevents/pressreleases/files/bcreg20180201a2.pdf. Return to text
11. See 12 CFR 225.8(e)(2). Return to text
12. See 78 FR 62018 (October 11, 2013); 12 CFR part 217. Return to text
13. Firms did not use the advanced approaches to calculate risk-weighted assets in CCAR 2018. See 12 CFR 225.8(d)(10). On November 21, 2017, the federal banking agencies finalized a rule applicable to non-advanced approaches banking organizations that extends the current regulatory capital treatment for mortgage servicing assets and certain other items. Return to text
14. For purposes of CCAR 2018, an advanced approaches BHC includes any firm that has consolidated assets greater than or equal to $250 billion or total consolidated on-balance sheet foreign exposure of at least $10 billion as of December 31, 2016. See 12 CFR 217.100(b)(1). Other BHCs include any firm that is subject to 12 CFR 225.8 and is not an advanced approaches BHC. Return to text