Federal Reserve requests comments on proposal addressing capital plan and stress test rules

Agency Rule-Making & Guidance Federal Reserve Federal Register Stress Test

On April 25, the Federal Reserve Board (Fed) published a request for comments in the Federal Register on a proposal to amend the Fed’s capital plan rule, capital rule, and stress testing rules by integrating the rules to simplify the capital regime. Under the proposed rule, a financial institution’s required stress capital buffer and stress leverage buffer would be established by the Fed’s supervisory stress test. The stress capital buffer requirement would replace the existing, static 2.5 percent of risk-weighted assets portion of the capital conservation buffer requirement under the standardized approach of the capital rule. The proposal—which would take effect December 31 with financial institutions’ first set of buffer requirements generally going into effect on October 1, 2019—would apply to bank holding companies with total consolidated assets of $50 billion or more, as well as U.S. intermediate holding companies of foreign banking organizations established pursuant to the Fed’s Regulation YY. Community banks, state member banks or saving and loan companies, and bank holding companies that do not meet the required asset threshold would be exempt. All comments must be received by June 25.