On September 26, 2016, the US Board of Governors of the Federal Reserve System issued a proposed rule modifying the capital plan and stress testing rules for the 2017 test cycle. The proposed changes include the elimination of the qualitative portion of the Comprehensive Capital Analysis and Review for certain large and noncomplex firms (generally, firms with less than $250 billion in total consolidated assets), along with a reduction in the amount of data that such firms would be required to submit on the FR Y-14 regulatory reports. Such institutions however, would remain subject to the quantitative CCAR requirements and to normal supervision by the Federal Reserve Board regarding their capital planning. The proposed rule would be effective for the 2017 CCAR. Comments on the proposal are due by November 25, 2016.
In a speech given the same day, Federal Reserve Board Governor Tarullo stated that the Federal Reserve Board is considering adoption of a "stress capital buffer approach" to setting post-stress capital requirements whereby the G-SIB capital surcharge would be factored into the estimate of the amount of capital required under stress. However, Governor Tarullo emphasized that this was a preliminary proposal and would not apply to the 2017 cycle of CCAR.
The text of the proposal is available at: http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20160926a1.pdf.
The text of Governor Tarullo's speech is available at: http://www.federalreserve.gov/newsevents/speech/tarullo20160926a.htm .
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