This story appeared in Bank Digest.
The Federal Reserve Board has released the scenarios banks and supervisors will use for the 2018 Comprehensive Capital Analysis and Review and Dodd-Frank Act stress test exercises and has issued instructions to firms participating in CCAR. According to the Fed, stress tests help ensure that banks will be able to lend to households and businesses even in a serious recession by ensuring that they have adequate capital to absorb losses.
CCAR evaluates the capital planning practices and capital adequacy of the largest U.S. bank holding companies and large U.S. operations of foreign firms. Firms participating in CCAR must submit their capital plans and stress testing results to the Fed on or before April 5, 2018. The Fed said it would announce the results of its supervisory stress tests by June 30, 2018, with the exact date to be announced later.