Fed's 2017 CCAR

February 2017

Overview

On February 3rd, the Federal Reserve (Fed) issued its Comprehensive Capital Analysis and Review (CCAR) instructions and three accompanying supervisory scenarios to be used for the CCAR and Dodd-Frank Act stress test exercises. The instructions and scenarios for the 2017 CCAR submissions are largely in line with those from prior years, but feature a severely adverse scenario that reflects ongoing concerns about the corporate loan and commercial real estate markets. The next CCAR cycle, with submissions due on April 5th, 2017, will also include relief on the qualitative portion of CCAR for ”larger and noncomplex” bank holding companies (BHCs).

  1. CCAR is only a numbers game for “large and noncomplex” BHCs.
  2. New IHCs: Welcome to the party.
  3. Higher payouts for large and noncomplex BHCs?
  4. Less flexibility in distributing additional capital between planning cycles.
  5. The Fed is now modeling PPNR to account for individual firm performance.
  6. The severely adverse scenario continues to lean on corporate loans and commercial real estate.
  7. Improvement in the economy in 2016 leads to bigger shocks.
  8. Global market shock January 3rd as-of date presents an opportunity.
  9. The supplementary leverage ratio is now included in CCAR.
  10. Will the next CCAR wave of innovation be trumped by the new administration? 

Contact us

Julien Courbe
Financial Services Advisory Leader
Tel: +1 (646) 471 4771
Email

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