Banking and Finance Law Daily Fed releases CCAR results; no objections to bank capital plans
Friday, June 28, 2019

Fed releases CCAR results; no objections to bank capital plans

By John M. Pachkowski, J.D.

The nation's largest banks have strong capital levels and virtually all are now meeting supervisory expectations for capital planning.

The Federal Reserve Board has released the results of its annual Comprehensive Capital Analysis and Review or CCAR. The CCAR is an annual exercise by the Fed to assess whether the largest bank holding companies operating in the United States have sufficient capital to continue operations throughout times of economic and financial stress and that they have robust, forward-looking capital-planning processes that account for their unique risks.

With the results of the CCAR, the Fed is not objecting to the capital plans of all 18 firms but is requiring one firm—Credit Suisse Holdings (USA), Inc.—to address limited weaknesses identified from the test.

Commenting on the results, Fed Vice Chair for Supervision Randal K. Quarles, stated, "The stress tests have confirmed that the largest banks are both well capitalized and place a high priority on strong capital planning practices. "The results show that these firms and our financial system are resilient in normal times and under stress."

Following the results’ release, Financial Services Forum President and CEO Kevin Fromer issued a statement. In it he said, "Today’s results underscore the strength and resiliency of the nation’s largest financial institutions. After facing a hypothetical scenario that was far worse than the financial crisis itself–including a larger increase in unemployment and a deeper recession than the 2018 test–Forum members have proven yet again that they can absorb losses and continue to support American businesses, households, and individuals during a time of severe financial stress."

For its part, Credit Suisse Holdings (USA), said, "The 2019 CCAR results indicate CSH USA’s commitment to an effective capital management and stress testing framework," said Eric Varvel, President and Chief Executive Officer of CSH USA. "We acknowledge the concerns relayed by the Fed and fully expect to remediate the issues by the October deadline given."

Companies: Credit Suisse Holdings (USA), Inc.; Financial Services Forum

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