Federal Reserve Press Release -- Capital Plans (R-1425)

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Press Release

Release Date: June 10, 2011
For immediate release
The Federal Reserve Board is seeking comment on a proposal to require top-tier U.S. bank holding
companies with total consolidated assets of $50 billion or greater to submit annual capital plans for
review.
The aim of the capital plan review, which builds on the Comprehensive Capital Analysis and
Review (CCAR) conducted earlier this year, is to ensure that institutions have robust, forwardlooking capital planning processes that account for their unique risks and that permit continued
operations during times of economic and financial stress. Institutions would be expected to have
credible plans to have sufficient capital so that they can continue to lend to households and
businesses, even under adverse conditions. Boards of directors of the institutions would be required
each year to review and approve capital plans before submitting them to the Federal Reserve.
The Federal Reserve would evaluate institutions' plans to make capital distributions, such as
increasing dividend payments or repurchasing or redeeming stock, as part of the capital plan
reviews. In some cases, such as when institutions' capital plans have been rejected by the Federal
Reserve, firms would be required to receive approval from the Federal Reserve before making
capital distributions.
The proposal would institutionalize the recently completed CCAR exercise. The CCAR involved a
forward-looking analysis of the capital plans at the 19 largest U.S. bank holding companies. The
CCAR followed the Supervisory Capital Assessment Program (SCAP), a standardized stress test led
by the Federal Reserve in 2009.
As of March 31, the most recent available data, 35 U.S. bank holding companies had assets of at
least $50 billion. According to the proposal, the level of detail and analysis expected in each
institution's capital plan would vary based on the company's size, complexity, risk profile, and scope
of operations. The Federal Reserve plans to finalize the proposal later this year and to begin the
annual capital plan reviews in early 2012.
The proposed capital plans would complement a number of components of the Dodd-Frank Wall
Street Reform and Consumer Protection Act, including the development of enhanced prudential
standards for large firms and required stress tests. As the Federal Reserve implements the DoddFrank Act, it is expected that the company-run Dodd-Frank stress tests will serve as one component
of institutions' capital plans.
The Federal Reserve requests comments on the capital plan review proposal, which will be
published soon in the Federal Register, by August 5, 2011.
For media inquiries, call 202-452-2955.

Attachment (101 KB PDF)

http://www.federalreserve.gov/newsevents/press/bcreg/20110610a.htm

6/10/2011