On February 3, 2017, the US Board of Governors of the Federal Reserve System released the scenarios to be used by banks and supervisors for the 2017 Comprehensive Capital Analysis and Review and stress test exercises (DFAST) mandated by the Dodd-Frank Act. The Federal Reserve Board concurrently issued instructions to firms participating in CCAR. For the 2017 cycle, a total of 13 of the largest and most complex bank holding companies will be subject to both the quantitative evaluation of their capital adequacy as well as a qualitative evaluation of their capital planning capabilities. The Federal Reserve Board had announced earlier, on January 30, 2017, that 21 firms with less complex operations will no longer be subject to the qualitative portion of CCAR.
Financial institutions are required to measure outcomes using three scenarios—severely adviser, adviser and baseline— in both the CCAR stress tests as well as the Dodd-Frank mandated stress tests. Each scenario includes 28 variables, including gross domestic product, unemployment rate, stock market prices, and interest rates, spanning domestic and international economic activity. Bank holding companies participating in CCAR are required to submit their capital plans and stress testing results to the Federal Reserve on or before April 5, 2017. The Federal Reserve will announce the results of its supervisory stress tests by June 30, 2017, with the exact date to be announced later.
The 2017 Stress Test Scenarios are available at: https://www.federalreserve.gov/newsevents/press/bcreg/bcreg20170203a5.pdf ; and the CCAR summary instructions are available at: https://www.federalreserve.gov/newsevents/press/bcreg/bcreg20170203a4.pdf
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