Yesterday the Federal Reserve proposed changes to the Capital Plan rule, with comments accepted until August 11, 2014. While some of these changes will be well-received by the banks, the proposal overall continues the trend toward heightened regulatory expectations.
- The Fed raises the bar on the severity of the BHC-designed stress scenarios.
- The Fed proposes saving Thanksgiving, Hanukkah, Christmas, and New Year’s.
- Mid-cycle DFAST also moved back one quarter, preserving the 4th of July.
- Capital distributions are restricted if actual capital issuance falls below planned levels.
- Foreign-owned BHCs continue to be subject to the Capital Plan rule until their parent IHC becomes subject to it.
This First take elaborates on these key points.