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August 04, 2022
Federal Reserve Board publicizes the person capital necessities for all massive banks, efficient on October 1
For launch at 4:00 p.m. EDT
Following its stress take a look at earlier this yr, the Federal Reserve Board at present introduced the person capital necessities for all massive banks, efficient on October 1.
Massive financial institution capital necessities are partly decided by the Board’s stress take a look at outcomes, which offer a risk-sensitive and forward-looking evaluation of capital wants. The “Massive Banks Capital Necessities” desk exhibits every financial institution’s whole frequent fairness tier 1 capital requirement, which is made up of a number of parts, together with:
- The minimal capital requirement, which is similar for every agency and is 4.5 p.c;
- The stress capital buffer requirement, which is decided from the stress take a look at outcomes, and is at the least 2.5 p.c; and
- If relevant, a capital surcharge for international systemically essential banks (G-SIBs), which is up to date within the first quarter of every yr to account for the general systemic threat of every G-SIB.
If a financial institution’s capital dips beneath its whole requirement introduced at present, the financial institution is topic to computerized restrictions on each capital distributions and discretionary bonus funds.
The Board additionally at present affirmed the stress take a look at outcomes for 2 corporations that requested reconsideration. These corporations are Financial institution of America Company and Huntington Bancshares Integrated.
The reconsideration course of concerned an impartial group—separate from the stress testing group—that analyzed and evaluated the outcomes. The outcomes have been checked for errors and to make sure that the stress take a look at fashions, which undertaking the mortgage losses and revenues for banks beneath the hypothetical stress state of affairs, labored as supposed and have been in keeping with the ideas described within the Board’s Stress Testing Policy Statement.
For media inquiries, please electronic mail [email protected] or name (202) 452-2955.
Final Replace:
August 04, 2022