{"id":8947,"date":"2018-11-13T09:09:53","date_gmt":"2018-11-13T14:09:53","guid":{"rendered":"http:\/\/centerforfinancialstability.org\/wp\/?p=8947"},"modified":"2018-11-13T09:09:53","modified_gmt":"2018-11-13T14:09:53","slug":"frb-vice-chair-considers-proposed-amendments-to-stress-testing-program","status":"publish","type":"post","link":"https:\/\/centerforfinancialstability.org\/wp\/2018\/11\/13\/frb-vice-chair-considers-proposed-amendments-to-stress-testing-program\/","title":{"rendered":"FRB Vice Chair Considers Proposed Amendments to Stress Testing Program"},"content":{"rendered":"<p>Federal Reserve Board (&#8220;FRB&#8221;) Vice Chair for Supervision Randal K. Quarles <a href=\"https:\/\/www.federalreserve.gov\/newsevents\/speech\/quarles20181109a.htm\">considered<\/a> proposed changes to the FRB&#8217;s large bank stress testing regime that would increase transparency and efficiency.<\/p>\n<p>In a speech at the Brookings Institution, Mr. Quarles said that the FRB is seeking to improve the measurement of trading book-related risks, and that a &#8220;single market shock&#8221; approach in existing stress testing practice does not adequately capture risks in firms&#8217; trading books. He said that the proposed changes &#8220;are not intended to alter materially the overall level of capital in the system or the stringency of the regime.&#8221;<\/p>\n<p>Mr. Quarles discussed changes to the Comprehensive Capital Analysis Review (&#8220;CCAR&#8221;) indicating that the FRB will reconsider whether any part of the <a href=\"https:\/\/www.findknowdo.com\/us\/cfr\/12\/217\/part_217-capital_adequacy_of_bank_holding_companies_savings_and_loan_holding_companies\">regulatory capital rule<\/a> (the stress capital buffer or &#8220;SCB&#8221;) proposal will remain for the 2019 CCAR. He said that he intends to request that the FRB exempt firms with less than $250 billion in assets from the 2019 CCAR quantitative assessment and supervisory stress testing in light of the <a href=\"http:\/\/www.cadwalader.com\/resources\/clients-friends-memos\/rightsizing-regulation-us-banking-agencies-release-tailoring-proposals-and-regional-banks-are-the-winners\">FRB&#8217;s recent tailoring proposal<\/a>. In addition, Mr. Quarles expressed his support for &#8220;normaliz[ing] the CCAR qualitative assessment&#8221; by (i) removing the public objection tool and (ii) evaluating firms&#8217; stress testing practices through &#8220;normal supervision.&#8221;<\/p>\n<p>Mr. Quarles stated that elements of the proposal to integrate stress testing with the stress capital buffer will be amended after receiving public comment. As a result, the SCB, which was scheduled for the 2019 stress test cycle, will be delayed. Mr. Quarles said that the first SCB may go into effect after 2020.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Federal Reserve Board (&#8220;FRB&#8221;) Vice Chair for Supervision Randal K. Quarles considered proposed changes to the FRB&#8217;s large bank stress testing regime that would increase transparency and efficiency. In a speech at the Brookings Institution, Mr. Quarles said that the &hellip; <a href=\"https:\/\/centerforfinancialstability.org\/wp\/2018\/11\/13\/frb-vice-chair-considers-proposed-amendments-to-stress-testing-program\/\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,40,34],"tags":[],"class_list":["post-8947","post","type-post","status-publish","format-standard","hentry","category-bankcap","category-banking-and-shadow-banking","category-transparency"],"_links":{"self":[{"href":"https:\/\/centerforfinancialstability.org\/wp\/wp-json\/wp\/v2\/posts\/8947","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/centerforfinancialstability.org\/wp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/centerforfinancialstability.org\/wp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/centerforfinancialstability.org\/wp\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/centerforfinancialstability.org\/wp\/wp-json\/wp\/v2\/comments?post=8947"}],"version-history":[{"count":1,"href":"https:\/\/centerforfinancialstability.org\/wp\/wp-json\/wp\/v2\/posts\/8947\/revisions"}],"predecessor-version":[{"id":8948,"href":"https:\/\/centerforfinancialstability.org\/wp\/wp-json\/wp\/v2\/posts\/8947\/revisions\/8948"}],"wp:attachment":[{"href":"https:\/\/centerforfinancialstability.org\/wp\/wp-json\/wp\/v2\/media?parent=8947"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/centerforfinancialstability.org\/wp\/wp-json\/wp\/v2\/categories?post=8947"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/centerforfinancialstability.org\/wp\/wp-json\/wp\/v2\/tags?post=8947"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}