Federal Reserve Adopts Changes to Capital Buffers and Stress Testing Standards
The federal banking agencies recently issued a final rulemaking to revise the capital rules applicable to banking organizations, especially global systemically important banking organizations (“GSIBs”) and other banking organizations subject to the Federal Reserve’s Comprehensive Capital Analysis and Review (“CCAR”) process. In particular, the final rules replace the static capital conservation buffer with a dynamic “stress capital buffer” tied to the results of a banking organization’s CCAR modeling, and adjust certain CCAR stress test assumptions and review standards.