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Home > News & Events > Press Releases

Press Release
August 19, 2013

Federal Reserve Board releases paper on capital
planning at large bank holding companies
For immediate release
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Large bank holding companies have considerably improved their capital
planning processes in recent years, but have more work to do to
enhance their practices for assessing the capital they need to withstand
stressful economic and financial conditions, the Federal Reserve said in
a paper released on Monday.
In the paper, the Federal Reserve discussed in detail its expectations for
internal capital planning at large bank holding companies and described
the range of practices it has observed at these companies during the
past three Comprehensive Capital Analysis and Review (CCAR)
exercises. The Federal Reserve conducts the CCAR annually to help
ensure that companies have forward-looking capital planning processes
that account for their unique risks and result in sufficient capital to
enable the institutions to continue lending to households and businesses
during times of economic and financial stress.
The paper, Capital Planning at Large Bank Holding Companies:
Supervisory Expectations and Range of Current Practice, is intended to
promote better capital planning at bank holding companies generally,
and to provide greater clarity on the standards against which those
practices are evaluated as part of the CCAR exercise. In particular, the
Federal Reserve emphasized that bank holding companies, when
considering their capital needs, should focus on the specific risks they
could face under potentially stressful conditions.   

In its evaluation, the Federal Reserve found that firms needed to
improve a number of aspects of their capital planning processes,
including their accounting for risks most relevant to the specific business
activities, their methods of projecting the effect of certain stresses on
their capital needs, and their governance of the capital planning
processes.
The Federal Reserve will start the 2014 CCAR process in the fall. In
addition to the 18 firms that participated in 2013, 12 firms with more than
$50 billion in total assets that have not previously been part of the CCAR
are expected to participate.
Capital Planning at Large Bank Holding Companies (PDF) | HTML
For media inquiries, call 202-452-2955

Last Update: August 19, 2013

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