Federal Reserve Proposes Stress Capital Buffer Requirement

2 May 2018
View Debevoise InDepth
Key takeaways:
  • On April 10, 2018, the Federal Reserve Board (“FRB”) proposed a “stress capital buffer” requirement that would replace the fixed 2.5% portion of capital conservation buffer and a stress leverage buffer requirement that would apply on top of the 4% minimum tier 1 leverage ratio.
  • The proposals would be integrated with the FRB’s regulatory capital, capital planning and stress testing regimes, as well as the recently proposed Stress Testing Policy Statement.
  • These proposed changes reflect one of the last regulatory reform initiatives championed by former FRB Governor Daniel Tarullo before he stepped down in April 2017.