Requirements in CCAR 2019
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.4 In 2013, the Board adopted a revised regulatory capital framework to address shortcomings in capital requirements that became apparent during the financial crisis.5 A firm must meet the regulatory capital requirements for each quarter of the planning horizon under both expected and stressful conditions in CCAR. In February 2017, the Federal Reserve amended the capital plan rule to remove large and noncomplex firms from the qualitative assessment of CCAR. In February 2019, the Federal Reserve announced that certain firms with total consolidated assets between $100 billion and $250 billion would not be subject to the company-run and supervisory stress testing requirements nor the requirement to submit a capital plan during the 2019 cycle.6 In March 2019, the Federal Reserve adopted a final rule that eliminated the Board's authority to object to capital plans on qualitative grounds for firms other than five recently subject to CCAR that continue to exhibit material deficiencies in capital planning.7
For the CCAR 2019 exercise, the Federal Reserve sent a letter to firms defining the scope of the exercise in December 2018, issued instructions for the exercise on March 6, 2019,8 and received capital plans from participating firms on April 5, 2019.
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.9
References
4. 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
5. See 78 FR 62018 (October 11, 2013); 12 CFR part 217. Return to text
6. See Board of Governors of the Federal Reserve System, "Federal Reserve Board Releases Scenarios for 2019 Comprehensive Capital Analysis and Review (CCAR) and Dodd-Frank Act Stress Test Exercises," press release, February 5, 2019, https://www.federalreserve.gov/newsevents/pressreleases/bcreg20190205b.htm. These firms remain subject to capital planning requirements and will be subject to supervisory stress testing and capital plan submission requirements in 2020. Return to text
7. See Board of Governors of the Federal Reserve System, "Federal Reserve Board Announces It Will Limit the Use of the ‘Qualitative Objection' in Its Comprehensive Capital Analysis and Review (CCAR) Exercise, Effective for the 2019 Cycle," press release, March 6, 2019, https://www.federalreserve.gov/newsevents/pressreleases/bcreg20190306b.htm. In CCAR 2019, Barclays US LLC; Credit Suisse Holdings (USA), Inc.; DB USA Corporation; TD Group US Holdings LLC; and UBS Americas Holding LLC are subject to the qualitative objection. Return to text
8. See Board of Governors of the Federal Reserve System, Comprehensive Capital Analysis and Review 2019 Summary Instructions(Washington: Board of Governors, March 2019), https://www.federalreserve.gov/newsevents/pressreleases/bcreg20190306b.htm. Return to text
9. See 12 CFR 225.8(e)(2). Return to text