The Federal Reserve’s CCAR and DFAST stress test results

In a year of "firsts," CCAR banks enter unchartered territory

The Federal Reserve Board (FRB) released the results of the latest Dodd-Frank Stress Test (DFAST)/Comprehensive Capital Analysis and Review (CCAR) on June 25, 2020. The stress tests evaluated the capital planning processes and adequacies of 33 of the largest banks. Notably, the 2020 CCAR cycle represented a series of ‘firsts’ for participating banks and the FRB, including areas that represent potential considerations for financial firms going forward:

• Every institution passed with no objections
• Regulators curtailed capital actions for all CCAR participants
• The capital planning process (including governance layer) was executed in a ‘crisis’ and essentially through an off-premise or ‘virtual’ environment
• A stress capital buffer (SCB) concept was added
• Resubmission was mandated for all CCAR participants later this year

In addition to the unprecedented, virtual nature of the 2020 CCAR process, the uncertain and rapidly evolving environment ahead makes it clear that the financial services industry is continuing its journey through uncharted territory.

Learn more about the stress testing results and what challenges banks may face on the road ahead in our latest article.

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