12 Jul 2022
Federal Reserve Calls for Increase in Bank Capital
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (DFA) sets forth risk-based and leverage capital requirements on a broad range of regulated financial institutions. During the 2020 COVID-19 pandemic, the Federal Reserve reduced bank capital requirements. Recently, the Federal Reserve instructed certain large financial institutions to raise common equity Tier 1 capital to ensure appropriate capital buffers are in place, should a stress condition, such as a severe recession, occur. Review this practice note to gain an understanding of bank stress testing requirements under the DFA, and the authority of the Federal Reserve to conduct annual supervisory stress test and regulate bank capital levels.
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Learn about the enhanced prudential standards requirements under DFA for systemically important financial institutions (SIFIs). The information in this practice note includes key standards for risk-based capital and leverage requirements.
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Access this practice note to learn about the role of the Basel Committee on Banking Supervision (BCBS) in setting prudential regulation and supervision standards for international financial institutions. The practice note explores BCBS risk-based capital requirements and capital requirements for U.S. banks.
- Basel III Risk Coverage Requirements
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