On January 19, the Federal Reserve Board adopted a final rule updating the agency’s capital planning and stress testing requirements applicable to large bank holding companies and U.S. intermediate holding companies of foreign banking organizations. Among other things, the final rule, which is generally similar to the Fed’s September 2020 notice of proposed rulemaking (covered by InfoBytes here), conforms the capital planning, regulatory reporting, and stress capital buffer requirements for firms with $100 billion or more in total assets (Category IV) with the tailored regulatory framework approved by the Fed in 2019 (covered by InfoBytes here). The final rule also makes additional changes to the Fed’s stress testing rules, stress testing policy statement, and regulatory reporting requirements related to “business plan changes and capital actions and the publication of company-run stress test results for savings and loan holding companies.” In addition, the Fed’s capital planning and stress capital buffer requirements will now apply to covered saving and loan holding companies subject to Category II, III, and IV standards under the tailoring framework. The Fed notes that firms in the lowest risk category are on a two-year stress test cycle and will not be subject to company-run stress test requirements. The final rule takes effect 60 days after publication in the Federal Register.
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