In this report, FedFin builds on the analysis provided Friday to clients on the FRB’s “comprehensive capital analysis and review” (CCAR) project.   It turns from a focus on the CCAR’s immediate findings to its impact on pending issues.  These include the new capital plans mandated for large BHCs, which impose new duties on bank boards, Basel III implementation (see FSM Report CAPITAL173) the Dodd-Frank stress tests, and overall FRB action on Dodd-Frank prudential standards.  Importantly, the FRB’s release stipulates that results were determined in part by consultation with the FDIC for BHCs that have outstanding obligations under the temporary liquidity guarantee program (TLGP); it remains to be seen if the FDIC is satisfied with this consultation, given that it signaled in advance of the results that it had considerable concerns in this area.  As detailed in this report, FedFin believes that the FRB’s CCAR makes much in the Basel III capital standards the de facto rule now for large U.S. BHCs despite the transition periods in the global rules. Because of the new capital plans, boards at the largest BHCs may need to revise review-and-approval procedures related to capital adequacy.

The full report is available to retainer clients.  To find out how you can sign up for the service, click here.

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