On December 21, 2015, the US Board of Governors of the Federal Reserve System issued guidance for the benefit of its examiners, as well as banking institutions, intended to consolidate its capital planning expectations for all large financial institutions and identify differences in its expectations, depending on the size and complexity of such institutions. For institutions that are bank holding companies and intermediate holding companies of foreign banks subject to the Federal Reserve Board’s Large Institution Supervision Coordinating Committee framework, and firms with $250 billion or more in total consolidated assets or $10 billion or more in foreign exposures, the guidance explains expectations previously communicated to such institutions through prior Comprehensive Capital Analysis and Review exercises and related supervisory reviews. The guidance also clarifies capital planning processes for firms with more than $50 billion, but less than $250 billion in total consolidated assets, as well as less than $10 billion in foreign exposures, taking into account such firms’ lower systemic risk profiles and less complex operations. Additionally, the guidance notes that bank holding companies with more than $50 billion in total consolidated assets are subject to the Federal Reserve Board’s CCAR, which evaluates the firms’ planned capital actions, such as dividend payments and share buybacks and issuances. The guidance is effective for the 2016 CCAR cycle.
The Federal Reserve Supervisory Assessment of Capital Planning and Positions for LISCC Firms and Large and Complex Firms is available at: http://www.federalreserve.gov/bankinforeg/srletters/sr1518.htm.
The Federal Reserve Supervisory Assessment of Capital Planning and Positions for Large and Noncomplex Firms is available at: http://www.federalreserve.gov/bankinforeg/srletters/sr1519.htm.