This story appeared in Bank Digest.
The Federal Reserve Board has released the supervisory scenarios for the 2016 Comprehensive Capital Analysis and Review and Dodd-Frank Act stress test exercises and has also issued instructions to firms participating in CCAR. According to the agency's press release, CCAR evaluates the capital planning processes and capital adequacy of the largest U.S.-based bank holding companies, while the Dodd-Frank Act stress tests help assess whether firms have sufficient capital. The release said that this year, CCAR will include 33 bank holding companies with $50 billion or more in total consolidated assets.
Financial institutions are required to use the supervisory scenarios in both the stress tests conducted as part of CCAR and those required by the Dodd-Frank Act, according to the Fed. The outcomes are measured under three scenarios: severely adverse, adverse, and baseline.