FRB Finalizes Capital Plan and Stress Testing Changes; Recent Developments Suggest More Changes Possible

14 February 2017
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Key takeaways

  • The Federal Reserve finalized a rule intended to further tailor the capital plan requirements for “large and noncomplex firms.”  For these institutions, the final rule (1) establishes a revised framework for identification; (2) removes the qualitative assessment component from the process;  and (3) reduces certain of the reporting requirements.  For all firms subject to capital planning processes, the final rule also decreases the de minimis threshold for additional capital distributions, and imposes a one-quarter “blackout period” to further reduce the availability of this exception.
  • While not certain, recent developments relating to executive, congressional and regulatory actions may result in further changes to the U.S. capital planning process, as well as the U.S. and international regulatory frameworks more generally.