Office Of Financial Research Update - The Case For Including Capital Buffers In Stress Tests

The U.S. Office of Financial Research today posted a research brief, entitled, “Capital Buffers and the Future of Bank Stress Tests,” and an accompanying blog, entitled, “The Case for Including Capital Buffers in Stress Tests,” by Deputy Director for Research and Analysis Stacey Schreft. The brief says U.S. bank regulators are phasing in new capital buffers to cushion against shocks. Systemically important banks will hold three buffers, while most banks will hold one. The Federal Reserve may integrate the buffers into stress tests. As a result, some banks would hold more capital. Without the change, stress tests could have a bigger impact on less systemic banks. Another proposal could make stress tests less effective.

The blog can be found here: https://www.financialresearch.gov/from-the-management-team/.

The brief can be found here: https://www.financialresearch.gov/briefs/.

The OFR home page is at: https://www.financialresearch.gov/.