CCAR Update

CCAR Update

Reported by: Eric Spahr, AxiomSL SME
News

This week the Federal Reserve issued rulings on banks’ dividend and share buy back plans based on the banks’ submission of their annual CCAR (Comprehensive Capital Adequacy Review). Included in the review were stress test parameter that banks had to use. Five banks were denied their plans: Citibank, RBS, HSBC, Santander, and Zion (which had failed to have projected capital above 5% under stressed conditions).

In objecting to Citi’s plans, the Fed cited “inadequate” improvement in areas flagged as needing more attention and finding fault with Citi’s ability to estimate revenue and loss projections under a stress scenario.

“When viewed together, they raise sufficient concerns regarding the overall reliability of Citigroup’s capital planning process to warrant an objection,” the Fed said.

It is the first time the Fed has put foreign-owned banks through the process. The regulator said it often objects to HSBC, RBS, and Santander’s debut plans, adding that the objections were of a qualitative nature – concerning the banks’ controls and models, rather than the level of capital they hold.

Barclays and Deutsche Bank were not part of this year’s stress tests but will be in the future. Their large New York investment banks will draw scrutiny from Fed officials, with any negative results potentially affecting capital distributions within the groups.

Press Contact

AxiomSL
Eric Spahr
E-Mail: espahr@axiomsl.com

About AxiomSL

AxiomSL is the global leader in regulatory reporting and risk management solutions for the financial services industry. Established more than 20 years ago, AxiomSL empowers financial institutions to meet regulatory reporting and risk requirements across multiple regulators and jurisdictions. Via the strategic data-driven platform, firms can meet demands from various regulations, including Basel III, FINREP/COREP, Dodd-Frank, CCAR, AIFMD, EMIR, FATCA and Solvency II, as well as liquidity, market and credit risk management requirements.

Leading financial firms use AxiomSL’s data management, regulatory reporting and risk management solutions to administer all internal data procedures, simplify, standardize and automate processes, and improve data integrity to successfully enhance decision making. The AxiomSL platform integrates clients’ source data from disparate systems and locations, without any data conversion, in a cost-effective manner, providing flexibility, transparency, traceability and the ability to drill down into data sources. It also delivers analytical applications in the areas of data integration and warehousing, financial risk management, regulatory reporting, compliance and financial control. This solution enables financial institutions to have full control over every step of the process and can adapt quickly to evolving regulations.

AxiomSL’s suite delivers a fully integrated solution from data sourcing to final reports including XBRL submission. www.axiomsl.com