The Federal Reserve Board ("FRB") voted to approve "individual large bank capital requirements." The capital requirements were determined after the completion of stress tests, "which provide a risk-sensitive and forward-looking assessment of capital needs." As described in an FRB press release, the announced capital requirements are comprised of several components, including a (i) 4.5 percent minimum capital requirement for each bank, (ii) stress capital buffer of at least 2.5 percent, and (iii) capital surcharge of at least 1.0 percent for global systemically important banks.
The requirements will go into effect on October 1, 2020.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
