The OTS issued guidance on March 15 recommending that all savings associations conduct an assessment of their capital adequacy. The memo to CEOs also recommends that the capital planning process result in capital targets appropriate for the savings association’s risk profile and business plan, and the development of contingency plans for addressing stress scenarios to which the savings association may be particularly vulnerable.

Notes: According to the guidance, OTS examiners will consider compliance with regulatory capital requirements, the quality of capital, holding company strength, the savings association’s capital planning process, and the extent to which that process is forward-looking and risk-focused in assessing capital adequacy. Examiners will also review the adequacy and reasonableness of internally established capital targets, and the savings association’s plans for meeting and maintaining those targets.