Federal Reserve Board announces final individual capital requirements for all large banks, effective on October 1
EDT
Following its stress test earlier this year, the Federal
Reserve Board on Wednesday announced final individual capital
requirements for all large banks, effective on October 1.
Large bank capital requirements are informed by the Board's
stress test results, which provide a risk-sensitive and forward-
looking assessment of capital needs. The table shows each bank's
common equity tier 1 capital requirement, which is made up of several
components, including:
The minimum capital requirement,
which is the same for each bank and is 4. 5 percent;
The
stress capital buffer requirement, which is based in part on the
stress test results and is at least 2. 5 percent; and
If
applicable, a capital surcharge for the largest and most complex
banks, which is updated in the first quarter of each year to account
for the overall systemic risk of each of these banks.
If
a bank's capital dips below its total requirement announced today, the
bank is subject to automatic restrictions on both capital
distributions and discretionary bonus payments.
Also
today, the Board announced that it had modified the stress capital
buffer requirement for Goldman Sachs, after the firm's request for
reconsideration. Based on an analysis of additional information
presented by the firm in its request, the Board determined it would be
appropriate to adjust the treatment of particular historical expenses
incurred by the bank in the stress testing models' input data, due to
the non-recurring nature of those expenses. As a result, the bank's
stress capital buffer requirement has been adjusted to 6. 2 percent
from a preliminary 6. 4 percent.
The Board is focused on
continuously improving the stress testing framework. To that end, the
Board will analyze whether to revise regulatory reporting forms to
better capture these types of data and to explore possible refinements
to certain model components.
For media inquiries, please
email [email protected] or call 202-452-2955. Last Update: August 28,
2024