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Tuesday, August 20, 2013

FRB Reports on Bank Holding Company Capital

This week the Federal Reserve Board (FRB) published a paper, Capital Planning at Large Bank Holding Companies: Supervisory Expectations and Range of Current Practice, that "discussed in detail its [the FRB's] expectations for internal capital planning at large bank holding companies and described the range of practices it has observed at these companies during the past three Comprehensive Capital Analysis and Review (CCAR) exercises."

According to the FRB, the paper "is intended to promote better capital planning at bank holding companies generally, and to provide greater clarity on the standards against which those practices are evaluated as part of the CCAR exercise."

The FRB identified several areas where the bank holding companies needed to improve on their capital planning processes, including:
  • accounting for risks most relevant to the specific business activities,
  • their methods of projecting the effect of certain stresses on their capital needs, and
  • their governance of the capital planning processes. 
Read the FRB's press release.

Read the full report.

The ABIA has an ABIA-member Task Force that works on issues impacting Bank Holding Companies. If you would like to learn more about this Task Force, please contact us.