Federal Reserve Board Proposes Capital Plan and Stress Testing Changes

6 October 2016
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Key takeaways

  • The Federal Reserve proposed revisions to its capital plan and stress test rules that are intended to further tailor the requirements for “large and noncomplex firms” and make certain other changes.
  • The proposal would: (1) establish a framework for identifying “large and noncomplex firms”; (2) remove the qualitative assessment component of the capital plan rule for large and noncomplex firms; (3) reduce certain reporting requirements for large and noncomplex firms; and (4) for all firms subject to the capital plan rule, increase the de minimis threshold for additional capital distributions and impose a one-quarter “blackout period” on any such distributions.
  • In addition, the Federal Reserve proposed to streamline and revise the “on boarding” process for those companies that trigger the application of the capital plan and stress test requirements.