U.S. banking regulators have finalized planned changes to its stress testing and capital planning rules.
The U.S. Federal Reserve Board announced on Wednesday that it has approved a final rule to modify its requirements for the 2016 capital plan and stress testing cycle. This would change the timing for several elements that have yet to be integrated into its stress testing framework.
Under the revised rules, larger banks wouldn’t have to incorporate the supplementary leverage ratio into their capital plans and stress testing until the 2017 cycle, and the use advanced approaches risk-based capital framework is to be delayed indefinitely. However, firms would continue to use the advanced approaches framework for establishing their regulatory capital ratios.
For smaller banks (those with more than US$10 billion but less than US$50 billion in total consolidated assets), the final rule modifies certain assumptions in the stress test rules, and delays the application of the company-run stress test requirements to savings and loan holding companies until 2017.
The Fed says that it also continues to review a broad range of issues related to its capital planning and stress testing rules. Any further changes emerging from that review would take effect in the 2017 cycle at the earliest.