Under the Regulatory Microscope
Top-Tier US Banks’ Capital Plans
Créé le
05.03.2014-
Mis à jour le
11.03.2014In the wake of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Federal Reserve has progressively expanded the scope, intensity and transparency of its annual assessment of top-tier US banks’ capital plans. This article highlights the key elements of the banks’ capital plan submissions which were identified as suffering from critical weaknesses. The thirty top-tier US banks now involved in this high-stakes annual assessment are painfully aware that even a passing grade is insufficient to meet either the Fed’s or the markets’ expectations.
When results of the first official, company-wide stress tests performed by top-tier US banking groups were published by the Federal Reserve in May of 2009, markets, banks and regulators all breathed a sigh of relief. Though half of the 19 banks involved demonstrated capital shortfalls, the results allayed the markets’ fears about their long-term viability and greatly facilitated the banks’ subsequent funding and capital-raising activities. In the five years since this first public exercise, considerable advances have been made in US banks’ stress testing practices, particularly ...
