Federal Reserve Board finalizes a rule that updates the Board’s capital planning requirements to be consistent with other Board rules that were recently modified

January 20, 2021 / Source: FRB

Press Release

The Federal Reserve Board on Tuesday finalized a rule that updates the Board's capital planning requirements to be consistent with other Board rules that were recently modified. The final rule is generally similar to the proposal.

In 2019, the Board finalized a framework that sorts large banks into different categories based on their risks, with requirements that are tailored to the risks of each category. The Board's capital planning requirements for these large banks help ensure they plan for and determine their capital needs under a range of different scenarios. The rule finalized today reflects that new framework. In particular, firms in the lowest risk category are on a two-year stress test cycle and not subject to company-run stress test requirements.

In a change from the proposal, the final rule applies capital planning requirements to large savings and loan holding companies that are not predominantly engaged in insurance or commercial activities.

Federal Register notice: Amendments to Capital Planning and Stress Testing Requirements for Large Bank Holding Companies, Intermediate Holding Companies and Savings and Loan Holding Companies.

Board Memo: Draft final rule to conform the Board's capital planning and related stress testing requirements to its prudential standards tailoring framework.