The Federal Reserve Board on Wednesday invited public comment on a proposal that would update the Board’s capital planning requirements to be consistent with other Board rules that were recently modified.
Last year, the Board finalized a framework that sorts large banks into different categories based on their risks, with rules that are tailored to the risks of each category. The proposal today updates the Board’s capital planning requirements—which help ensure that firms plan for and determine their capital needs under a range of different scenarios—to reflect 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 and the proposal reflects those changes. The proposal also would seek comment on the Board’s existing capital planning guidance applicable to all firms.
The proposal would not change firms’ capital requirements. Comments will be accepted until November 20, 2020.