FRB Simplifies Capital Rules For Big Banks

The Federal Reserve Board ("FRB") adopted a rule that will (i) simplify the requirements for large banks subject to capital plan rules and (ii) implement a stress capital buffer requirement.

The final rule will amend capital plan rules' requirements to (i) maintain or increase the capital required for global systemically important banks ("GSIBs") and (ii) decrease the capital required for non-GSIBs.

Additionally, the FRB will tailor the stress capital buffer requirement to each firm by using the results of its supervisory stress test. This will replace the current capital conservation buffer requirement.

Prior to adoption, the FRB made several changes including:

• not requiring a stress leverage buffer to be used when making a distinction between the capital framework's risk-based and non-risk-based capital requirements;