Proposal aims to bring capital planning rules into alignment with recent changes

A bit of “catch up” is being planned by the Federal Reserve over its capital planning requirements as it called Wednesday for public comment on a proposal to bring those rules in line with other regulations the agency recently modified.

In a release, the Fed said its proposal – with comments due Nov. 20 – updates the Board’s capital planning requirements to reflect the framework it finalized in 2019. The Fed noted that that setup sorted large banks into different categories based on their risks. The Fed said its proposal will “help ensure that firms plan for and determine their capital needs under a range of different scenarios to reflect that new framework.”

“In particular, firms in the lowest risk category are on a two-year stress test cycle and not subject to company-run stress test requirements and the proposal reflects those changes,” the agency said.

The proposal also seeks comment on the Board’s existing capital planning guidance applicable to all firms, the Fed said.

Federal Reserve Board invites public comment on proposal that would update the Board’s capital planning requirements to be consistent with other Board rules that were recently modified