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Press Release
March 26, 2014

Federal Reserve releases results of
Comprehensive Capital Analysis and Review
For immediate release

The Federal Reserve on Wednesday announced it has approved the
capital plans of 25 bank holding companies participating in the
Comprehensive Capital Analysis and Review (CCAR). The Federal
Reserve objected to the plans of the other five participating firms--four
based on qualitative concerns and one because it did not meet a
minimum post-stress capital requirement.
Strong capital levels help ensure that banking organizations have the
ability to lend to households and businesses and to continue to meet
their financial obligations, even in times of economic difficulty. Now in its
fourth year, the Federal Reserve in CCAR evaluates the capital planning
processes and capital adequacy of the largest bank holding companies,
including the firms' proposed capital actions such as dividend payments
and share buybacks and issuances.
When considering an institution's capital plan, the Federal Reserve
considers both qualitative and quantitative factors. These include a
firm's capital ratios under severe economic and financial market stress
and the strength of the firm's capital planning process. After the Federal
Reserve objects to a capital plan, the institution may only make capital
distributions with prior written approval from the Federal Reserve.
"The Federal Reserve's annual capital plan assessment provides a

structured and comparative way to promote and assess the capacity of
large bank holding companies to understand and manage their capital
positions," Federal Reserve Gov. Daniel Tarullo said. "With each year
we have seen broad improvement in the industry's ability to assess its
capital needs under stress and continuing improvements to the riskmeasurement and -management practices that support good capital
planning. However, both the firms and supervisors have more work to do
as we continue to raise expectations for the quality of risk management
in the nation's largest banks."
The Federal Reserve can object to a capital plan based on qualitative or
quantitative concerns, or both. The Federal Reserve can require a new
capital plan from an institution outside of the annual review at any time if
there is a material change in the condition of an individual institution or
in the economy or financial markets that could potentially lead to a
change in a firm's capital position.
The Federal Reserve did not object to the capital plans for Ally Financial
Inc.; American Express Company; Bank of America Corporation; The
Bank of New York Mellon Corporation; BB&T Corporation; BBVA
Compass Bancshares, Inc.; BMO Financial Corp.; Capital One Financial
Corporation; Comerica Incorporated; Discover Financial Services; Fifth
Third Bancorp; The Goldman Sachs Group, Inc.; Huntington Bancshares
Incorporated; JP Morgan Chase & Co.; Keycorp; M&T Bank
Corporation; Morgan Stanley; Northern Trust Corporation; The PNC
Financial Services Group, Inc.; Regions Financial Corporation; State
Street Corporation; SunTrust Banks, Inc.; U.S. Bancorp; UnionBanCal
Corporation; and Wells Fargo & Company. Bank of America Corporation
and The Goldman Sachs Group, Inc., met minimum capital requirements
after submitting adjusted capital actions.
Based on qualitative concerns, the Federal Reserve objected to the
capital plans of Citigroup Inc.; HSBC North America Holdings Inc.; RBS
Citizens Financial Group, Inc.; and Santander Holdings USA, Inc. The
Federal Reserve objected to the capital plan of Zions Bancorporation
because the firm did not meet the minimum, post-stress tier-1 common
ratio of 5 percent.
U.S. firms have substantially increased their capital since the first set of
government stress tests in 2009. The aggregate tier 1 common equity
ratio, which compares high-quality capital to risk-weighted assets, of the
30 bank holding companies in the 2014 CCAR has more than doubled
from 5.5 percent in the first quarter of 2009 to 11.6 percent in the fourth
quarter of 2013, reflecting an increase in tier 1 common equity of more
than $511 billion to $971 billion during the same period.
That trend is expected to continue. All but two of the 30 participants in
this year's CCAR are expected to build capital from the second quarter
of 2014 through the first quarter of 2015. In the aggregate, the firms are
expected to distribute 40 percent less than their projected net income
during the same period. The 30 institutions in CCAR this year have a
combined $13.5 trillion in assets, or approximately 80 percent of all U.S.
bank holding company assets.

Comprehensive Capital Analysis and Review 2014: Assessment
Framework and Results (PDF) | HTML
Board Votes
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Last Update: March 26, 2014

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