Skip to content

How to gain more from operational risk management practices.
Modern risk management technology solutions improve efficiency and provide greater visibility into risks. Today’s tools provide real-time visibility, action plans, enhanced reporting and business intelligence, and proactive notifications for operational risk. Real-time data empowers banks and financial services organizations to proactively manage risks and instantly detect and mitigate emerging issues. Click here to learn more.

Fed announces large bank capital requirements

The Federal Reserve has released the individual large bank capital requirements that will be effective October 1, 2020. Under its framework for large banks—those with more than $100 billion in total assets—capital requirements are in part determined by stress test results, which provide a risk-sensitive and forward-looking assessment of capital needs. The announcement listed the total common equity tier 1 (CET1) capital requirement for each of the 34 banks with over $100 billion in total assets, comprising:

  • Minimum capital requirements, which are the same for each firm and are 4.5 percent;
  • The stress capital buffer, which is determined from the stress test results, and is at least 2.5 percent; and
  • If applicable, a capital surcharge for global systemically important banks, or GSIBs, which is at least 1.0 percent.

The Board also affirmed the stress test results for five firms that requested reconsideration (BMO Financial Corporation, Capital One Financial Corporation, Citizens Financial Group, Inc., The Goldman Sachs Group Inc., and Regions Financial Corporation). The reconsideration process involved an independent group—separate from the stress testing group—that analyzed and evaluated the results. The results were checked for errors and to ensure that the stress test models, which project the loan losses for banks, worked as intended and were consistent with the Board's stress test framework. The Board said that information gleaned from the reconsideration process will be used to continue improving its stress testing methodology.

Filed under: 

Training View All

Penalties View All

Search Top Stories