SIFMA today released the following statement from Kenneth E. Bentsen, Jr., SIFMA president and CEO, regarding the results of the Dodd Frank Annual Stress Testing (DFAST) and Comprehensive Capital Analysis and Review (CCAR).
“Today’s release of the Federal Reserve’s CCAR outcome and, more importantly, the results of their COVID-19 sensitivity analysis underscore the resilience of the banking system. While the level of uncertainty in the economy continues to be high given the progression of the COVID-19 pandemic, the Federal Reserve subjected CCAR filers to unprecedented assumptions regarding unemployment and GDP contraction. Despite the draconian assumptions, the 33 largest filers in aggregate remained above minimum CET1 capital requirements.
“Beyond the resiliency evidenced by the test results, the Federal Reserve signaled firms will need to resubmit capital plans and that there will be an off-cycle supervisory stress test in the ‘later part of the year.’ The Federal Reserve already concluded firms’ capital planning management, processes, approaches and assumptions passed the toughest tests. Firms have demonstrated their skill at risk management under the most difficult scenarios and we question the necessity or value of added industry testing at this time as opposed to relying on normal supervisory processes.”
