Stress Testing and Capital Planning: Federal Reserve Issues Guidance for 2013 Cycle

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Today the Federal Reserve Board (the “Board”) issued instructions and guidelines for two 2013 stress testing and capital planning programs, each of which builds on similar programs from last year. The Comprehensive Capital Analysis and Review 2013 (“CCAR”) describes the testing process and resulting capital plans that are required for the 19 bank holding companies (“BHCs”) that participated in the CCAR for 2011 and 2012. The Capital Plan Review 2013 (“CapPR”) sets forth the testing and capital planning requirements for the 11 BHCs with $50 billion or more in consolidated assets that undertook a similar exercise last year. The instructions and guidelines for both programs implement the capital plan rule, 12 C.F.R. § 225.8, and reflect the supervisory concerns underlying the earlier testing and planning programs.

The CCARs in 2011 and 2012 and the CapPR in 2012, as well as section 225.8, should be familiar to many. Nevertheless, a few observations specific to today’s releases are in order...

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