“The average person who relies on the banking system should be happy. Next week will tell us whether banks and bank shareholders will be happy.”
The DFAST results published yesterday (March 20th) are the Federal Reserve’s first stress test results released in 2014. Following this release, about half of banks disclosed their own company-run stress test results (required by March 31st). On March 26th, the Federal Reserve (Fed) will release its 2014 Comprehensive Capital Analysis and Review (CCAR) results.
 The primary differences between DFAST and CCAR is that CCAR includes the BHCs’ submission of proposed capital actions and the Fed’s object or non-object determination. Capital actions under DFAST are standardized based on the BHC’s existing dividend payout rate.
 The 12 new DFAST and CCAR participants this year are BMO Financial, BBVA Compass Bancshares, Comerica, Discover Financial Services, HSBC North America Holdings, Huntington Bancshares, M&T Bank, Northern Trust, RBS Citizens Financial Group, Santander Holdings, USA, UnionBanCal, and Zions Bancorp.
 The eight BHCs required to perform the counterparty default scenario include the six BHCs that have been subject to the global market shock (Bank of America, Citigroup, Goldman Sachs, JP Morgan, Morgan Stanley, and Wells Fargo), and the two largest custodial banks (Bank of New York Mellon and State Street).