Fed Board won’t object to Capital One’s resubmitted capital plan

The Federal Reserve Board Friday said it would not object to the capital plan resubmitted by Capital One Financial Corporation given the progress the company made in addressing deficiencies in last year’s Comprehensive Capital Analysis and Review (CCAR). The Fed Board, in its announcement, said it will “continue to review and assess” that progress in this year’s CCAR submission.

Capital One was the only firm to receive a “conditional non-objection” to last year’s plan. The deficiencies identified in Capital One’s capital plan last year included weaknesses in the way the firm shared key capital planning information with its board of directors and senior managers, how it identified and incorporated its unique and material risks into its capital planning, and how it forecasted losses and balances under stressful scenarios.

Capital One is one of 38 financial companies that are participating in CCAR this year. CCAR evaluates the capital planning processes and capital adequacy of the largest U.S. bank holding companies, and large U.S. operations of foreign firms, using the firms’ planned capital actions such as dividend payments and share buybacks and issuances. “Strong capital levels act as a cushion to absorb losses and help ensure that banking organizations have the ability to lend to households and businesses even in times of stress,” the Fed said.

Fed announcement

CCAR 2017: Assessment Framework and Results (June 2017)