This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents.
Rules and Regulations Federal Register
56929
Vol. 84, No. 206
Thursday, October 24, 2019
1 Public Law 111–203, section 165(i)(2), 124 Stat.
1376, 1430–31 (2010).
2 77 FR 62417 (October 15, 2012). The Board and
the Office of the Comptroller of the Currency
contemporaneously issued comparable regulations.
See 77 FR 62380 (October 12, 2012) (Board); 77 FR
61238 (October 9, 2012) (OCC).
3 Public Law 115–174, 132 Stat. 1296–1368
(2018). 4 83 FR 13880 (April 2, 2018).
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 325
RIN 3064–AE84
Company-Run Stress Testing
Requirements for FDIC-Supervised
State Nonmember Banks and State
Savings Associations
AGENCY: Federal Deposit Insurance
Corporation.
ACTION: Final rule.
SUMMARY: The Federal Deposit
Insurance Corporation (FDIC) is
adopting a final rule to amend the
FDIC’s company-run stress testing
regulations applicable to state
nonmember banks and state savings
associations, consistent with section 401
of the Economic Growth, Regulatory
Relief, and Consumer Protection Act
(EGRRCPA). Specifically, the final rule
revises the minimum threshold for
applicability from $10 billion to $250
billion, revises the frequency of required
stress tests by FDIC-supervised
institutions, and reduces the number of
required stress testing scenarios from
three to two. The final rule also makes
certain conforming and technical
changes.
DATES: The final rule is effective
November 25, 2019.
FOR FURTHER INFORMATION CONTACT:
Ryan Sheller, Section Chief, (202) 412–
4861, RSheller@FDIC.gov, Large Bank
Supervision, Division of Risk
Management Supervision; or Benjamin
Klein, Counsel, (202) 898–7027, bklein@
FDIC.gov; Legal Division, Federal
Deposit Insurance Corporation, 550 17th
Street NW, Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
I. Policy Objective
The policy objective of the final rule
is to conform the FDIC’s regulations to
section 401 of EGRRCPA, which raises
the applicability threshold for company-
run stress testing required by section
165(i)(2) of the Dodd-Frank Wall Street
Reform and Consumer Protection Act
(Dodd-Frank Act) from $10 billion to
$250 billion, revises the required
periodicity of such stress testing from
‘‘annual’’ to ‘‘periodic,’’ and removes
the requirement that such stress testing
include an ‘‘adverse’’ scenario.
II. Background
Prior to the enactment of EGRRCPA,
section 165(i)(2) of the Dodd-Frank Act
required a financial company, including
an insured depository institution, with
total consolidated assets of more than
$10 billion and regulated by a primary
federal regulatory agency to conduct
annual stress tests and submit a report
to the Board of Governors of the Federal
Reserve System (Board) and to its
primary federal regulatory agency.1
Section 165(i)(2)(C) required each
primary federal regulator to issue
consistent and comparable regulations
to: (1) Implement the stress testing
requirements, including establishing
methodologies for conducting stress
tests that provided for at least three
different sets of conditions, including
baseline, adverse, and severely adverse;
(2) establish the form and content of the
required reports, and (3) require
companies to publish a summary of the
stress test results.
In October 2012, the FDIC published
in the Federal Register its rule
implementing the Dodd-Frank Act stress
testing requirement.2 The FDIC
regulation at 12 CFR part 325
implements the company-run stress test
requirements of section 165(i)(2) of the
Dodd-Frank Act with respect to state
nonmember banks and state savings
associations with more than $10 billion
in assets (covered banks). Although 12
CFR part 325 applies to all covered
banks that exceed $10 billion in assets,
the regulation differentiates between
‘‘$10 billion to $50 billion covered
banks’’ and ‘‘over $50 billion covered
banks.’’
EGRRCPA, enacted on May 24, 2018,3
amended certain aspects of the
company-run stress-testing
requirements in section 165(i)(2) of the
Dodd-Frank Act. Specifically, section
401 of EGRRCPA raises the minimum
asset threshold for the company-run
stress testing requirement from $10
billion to $250 billion; replaces the
requirement for banks to conduct stress
tests ‘‘annually’’ with the requirement to
conduct stress tests ‘‘periodically;’’ and
no longer requires the ‘‘adverse’’ stress
testing scenario, thus reducing the
number of required stress testing
scenarios from three to two. The
EGRRCPA amendments to the section
165(i)(2) stress testing requirements are
effective eighteen months after
enactment.
Prior to the enactment of EGRRCPA,
on April 2, 2018, the FDIC issued a
notice of proposed rulemaking that also
proposed certain revisions to the FDIC
stress testing regulations (April 2018
NPR).4 Certain changes proposed in the
April NPR, particularly those
establishing a stress testing transition
process for ‘‘over $50 billion covered
banks’’ are no longer relevant as a result
of EGRRCPA’s increase in the stress
testing asset threshold to $250 billion.
However, other revisions originally
proposed in the April NPR remain
necessary to ensure the FDIC’s stress
testing regulations remain consistent
with those of the Board and the Office
of the Comptroller of the Currency
(OCC).
III. Proposed Rule
On December 28, 2018, the FDIC
published in the Federal Register a
notice of proposed rulemaking
(proposed rule or proposal) to amend 12
CFR part 325 consistent with section
401 of EGRRCPA. Specifically, the
proposal would have raised the
applicability threshold for covered
banks required to conduct stress tests
from $10 billion to $250 billion,
reduced the frequency by which
covered banks would generally be
required to conduct stress tests from
annually to biennially, and eliminated
the requirement that covered banks use
the ‘‘adverse’’ scenario when
conducting stress tests. The proposal
also included various technical changes
to facilitate the above revisions, a
proposed transition period, and
proposed revisions to the regulation’s
VerDate Sep<11>2014 15:51 Oct 23, 2019 Jkt 250001 PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 E:\FR\FM\24OCR1.SGM 24OCR1
khammond on DSKJM1Z7X2PROD with RULES
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents.
Rules and Regulations Federal Register
56929
Vol. 84, No. 206
Thursday, October 24, 2019
1 Public Law 111–203, section 165(i)(2), 124 Stat.
1376, 1430–31 (2010).
2 77 FR 62417 (October 15, 2012). The Board and
the Office of the Comptroller of the Currency
contemporaneously issued comparable regulations.
See 77 FR 62380 (October 12, 2012) (Board); 77 FR
61238 (October 9, 2012) (OCC).
3 Public Law 115–174, 132 Stat. 1296–1368
(2018). 4 83 FR 13880 (April 2, 2018).
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 325
RIN 3064–AE84
Company-Run Stress Testing
Requirements for FDIC-Supervised
State Nonmember Banks and State
Savings Associations
AGENCY: Federal Deposit Insurance
Corporation.
ACTION: Final rule.
SUMMARY: The Federal Deposit
Insurance Corporation (FDIC) is
adopting a final rule to amend the
FDIC’s company-run stress testing
regulations applicable to state
nonmember banks and state savings
associations, consistent with section 401
of the Economic Growth, Regulatory
Relief, and Consumer Protection Act
(EGRRCPA). Specifically, the final rule
revises the minimum threshold for
applicability from $10 billion to $250
billion, revises the frequency of required
stress tests by FDIC-supervised
institutions, and reduces the number of
required stress testing scenarios from
three to two. The final rule also makes
certain conforming and technical
changes.
DATES: The final rule is effective
November 25, 2019.
FOR FURTHER INFORMATION CONTACT:
Ryan Sheller, Section Chief, (202) 412–
4861, RSheller@FDIC.gov, Large Bank
Supervision, Division of Risk
Management Supervision; or Benjamin
Klein, Counsel, (202) 898–7027, bklein@
FDIC.gov; Legal Division, Federal
Deposit Insurance Corporation, 550 17th
Street NW, Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
I. Policy Objective
The policy objective of the final rule
is to conform the FDIC’s regulations to
section 401 of EGRRCPA, which raises
the applicability threshold for company-
run stress testing required by section
165(i)(2) of the Dodd-Frank Wall Street
Reform and Consumer Protection Act
(Dodd-Frank Act) from $10 billion to
$250 billion, revises the required
periodicity of such stress testing from
‘‘annual’’ to ‘‘periodic,’’ and removes
the requirement that such stress testing
include an ‘‘adverse’’ scenario.
II. Background
Prior to the enactment of EGRRCPA,
section 165(i)(2) of the Dodd-Frank Act
required a financial company, including
an insured depository institution, with
total consolidated assets of more than
$10 billion and regulated by a primary
federal regulatory agency to conduct
annual stress tests and submit a report
to the Board of Governors of the Federal
Reserve System (Board) and to its
primary federal regulatory agency.1
Section 165(i)(2)(C) required each
primary federal regulator to issue
consistent and comparable regulations
to: (1) Implement the stress testing
requirements, including establishing
methodologies for conducting stress
tests that provided for at least three
different sets of conditions, including
baseline, adverse, and severely adverse;
(2) establish the form and content of the
required reports, and (3) require
companies to publish a summary of the
stress test results.
In October 2012, the FDIC published
in the Federal Register its rule
implementing the Dodd-Frank Act stress
testing requirement.2 The FDIC
regulation at 12 CFR part 325
implements the company-run stress test
requirements of section 165(i)(2) of the
Dodd-Frank Act with respect to state
nonmember banks and state savings
associations with more than $10 billion
in assets (covered banks). Although 12
CFR part 325 applies to all covered
banks that exceed $10 billion in assets,
the regulation differentiates between
‘‘$10 billion to $50 billion covered
banks’’ and ‘‘over $50 billion covered
banks.’’
EGRRCPA, enacted on May 24, 2018,3
amended certain aspects of the
company-run stress-testing
requirements in section 165(i)(2) of the
Dodd-Frank Act. Specifically, section
401 of EGRRCPA raises the minimum
asset threshold for the company-run
stress testing requirement from $10
billion to $250 billion; replaces the
requirement for banks to conduct stress
tests ‘‘annually’’ with the requirement to
conduct stress tests ‘‘periodically;’’ and
no longer requires the ‘‘adverse’’ stress
testing scenario, thus reducing the
number of required stress testing
scenarios from three to two. The
EGRRCPA amendments to the section
165(i)(2) stress testing requirements are
effective eighteen months after
enactment.
Prior to the enactment of EGRRCPA,
on April 2, 2018, the FDIC issued a
notice of proposed rulemaking that also
proposed certain revisions to the FDIC
stress testing regulations (April 2018
NPR).4 Certain changes proposed in the
April NPR, particularly those
establishing a stress testing transition
process for ‘‘over $50 billion covered
banks’’ are no longer relevant as a result
of EGRRCPA’s increase in the stress
testing asset threshold to $250 billion.
However, other revisions originally
proposed in the April NPR remain
necessary to ensure the FDIC’s stress
testing regulations remain consistent
with those of the Board and the Office
of the Comptroller of the Currency
(OCC).
III. Proposed Rule
On December 28, 2018, the FDIC
published in the Federal Register a
notice of proposed rulemaking
(proposed rule or proposal) to amend 12
CFR part 325 consistent with section
401 of EGRRCPA. Specifically, the
proposal would have raised the
applicability threshold for covered
banks required to conduct stress tests
from $10 billion to $250 billion,
reduced the frequency by which
covered banks would generally be
required to conduct stress tests from
annually to biennially, and eliminated
the requirement that covered banks use
the ‘‘adverse’’ scenario when
conducting stress tests. The proposal
also included various technical changes
to facilitate the above revisions, a
proposed transition period, and
proposed revisions to the regulation’s
VerDate Sep<11>2014 15:51 Oct 23, 2019 Jkt 250001 PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 E:\FR\FM\24OCR1.SGM 24OCR1
khammond on DSKJM1Z7X2PROD with RULES
56930 Federal Register / Vol. 84, No. 206 / Thursday, October 24, 2019 / Rules and Regulations
5 One commenter recommended that the FDIC,
OCC, and FRB (agencies) not include the adverse
scenario in the 2019 stress tests. The FDIC did not
consider it necessary to do so, and notes that the
EGRRCPA amendments to the Dodd-Frank Act’s
company-run stress testing requirements are
effective November 24, 2019.
6 See ‘‘Prudential Standards for Large Bank
Holding Companies and Savings and Loan Holding
Companies,’’ 83 FR 61408 (Nov. 29, 2018).
7 A Category III holding company would be a
holding company that is not a Category II holding
company and that has (1) $250 billion or more in
average total consolidated assets or (2) $100 billion
reservation of authority. The proposed
rule also included certain provisions
initially proposed in the April 2018
NPR, such as extending the as-of date
range for trading and counterparty
components for covered banks with
significant trading activities.
The FDIC received six comments in
response to the proposed rule. With
respect to raising the applicability
threshold from $10 to $250 billion,
some commenters supported raising the
threshold, others acknowledged that
such a revision was statutorily required,
and others expressed concern that
eliminating stress testing requirements
for banks under $250 billion may raise
prudential concerns. Similarly, some
commenters supported the proposed
rule’s elimination of the ‘‘adverse’’
scenario, positing that the adverse
scenario is of limited utility,5 some
acknowledged that removing the
‘‘adverse’’ scenario is statutorily
required, and others expressed concern
that eliminating the ‘‘adverse’’ scenario
may reduce the efficacy of company-run
stress testing. The FDIC appreciates the
concerns raised by commenters, but
does not believe that they warrant
changes to the proposal, and is
finalizing without change the proposal
to align the regulatory threshold for
company-run stress testing by covered
banks with the statutory threshold of
$250 billion established by section 401
of EGRCCPA, and to eliminate the
‘‘adverse’’ scenario requirement,
consistent with section 401 of
EGRCCPA.
With respect to the proposed rule’s
requirement that covered banks
generally be subject to biennial stress
testing, some commenters supported
biennial stress testing as being an
appropriate frequency for most covered
banks, while others contended that
reducing the frequency from annual to
biennial would not be appropriate.
Among the concerns highlighted by
these commenters was that such a
reduction in the frequency of stress
testing could lead to complacency by
covered banks in managing risk, and
that biennial stress tests would not be
sufficiently current to be credible. One
commenter specifically suggested that a
data-driven empirical analysis should
support the change from annual to
biennial stress testing, and that biennial
stress testing would not be appropriate
since firms make choices about
dividends and repurchases on an annual
basis. This commenter also suggested
that the risks associated with reducing
the frequency of stress testing would be
amplified by other regulatory proposals
addressing capital and liquidity
requirements.
Based on its experience in overseeing
and reviewing the results of company-
run stress testing, the FDIC believes that
biennial stress testing would be
appropriate under most conditions for
covered banks. The FDIC expects
biennial stress testing to sufficiently
satisfy the purposes of stress testing,
including assisting in an overall
assessment of a covered bank’s capital
adequacy, identifying risks and the
potential impact of adverse financial
and economic conditions on a covered
bank’s capital adequacy, and
determining whether additional
analytical techniques and exercises
would be appropriate for a covered bank
to employ in identifying, measuring,
and monitoring risks to the soundness
of the covered bank. In addition, the
FDIC would continue to review the
covered bank’s stress testing processes
and procedures. Under the final rule, all
covered banks that conduct stress tests
on a biennial basis are required to
conduct stress tests in the same
reporting year (i.e., the reporting years
for biennial stress testing covered banks
would be synchronized). By requiring
these covered banks to conduct their
stress tests in the same reporting year,
the final rule allows the FDIC to make
comparisons across banks for
supervisory purposes and assess
macroeconomic trends and risks to the
banking industry. The FDIC also notes
that it retains the ability to require more
frequent stress testing pursuant to its
reservation of authority under 12 CFR
325.1(c).
IV. Final Rule
The FDIC is adopting without change
the proposed revisions to the FDIC’s
stress testing rule, as described in detail
below.
A. Covered Banks
Section 401 of EGRRCPA amended
section 165 of the Dodd-Frank Act by
raising the minimum asset threshold for
banks required to conduct stress tests
from $10 billion to $250 billion. The
final rule implements this change by
eliminating the two existing
subcategories of ‘‘covered bank’’—‘‘$10
to $50 billion covered bank’’ and ‘‘over
$50 billion covered bank’’—and revising
the term ‘‘covered bank’’ to mean a state
nonmember bank or state savings
association with average total
consolidated assets that are greater than
$250 billion. In addition, the final rule
makes certain technical and conforming
changes to 12 CFR part 325 in order to
consolidate requirements, such as those
related to reporting and publication,
that are currently referenced separately
with respect to $10 billion to $50 billion
covered banks and over $50 billion
covered banks.
B. Frequency of Stress Testing
Section 401 of EGRRCPA also
changed the requirement under section
165 of the Dodd-Frank Act to conduct
stress tests from ‘‘annual’’ to ‘‘periodic.’’
Consistent with proposals by the Board
and the OCC, the final rule provides
that, in general, an FDIC-supervised
institution that is a covered bank as of
December 31, 2019, is required to
conduct, report, and publish a stress test
once every two years, beginning on
January 1, 2020, and continuing every
even-numbered year thereafter (i.e.,
2022, 2024, 2026, etc.). The final rule
also adds a new defined term,
‘‘reporting year,’’ to the definitions at 12
CFR 325.2. A covered bank’s reporting
year is the year in which a covered bank
must conduct, report, and publish its
stress test. As noted above, the
‘‘reporting year’’ for most covered banks
would generally be every even-
numbered year.
Certain covered banks may be
required to conduct stress tests annually
under the final rule. This subset of
covered banks is limited to those that
are consolidated under holding
companies that are required to conduct
stress tests more frequently than once
every other year. On November 29,
2018, the Board published a proposed
rule that would establish risk-based
categories for determining the
application of prudential standards,
including stress testing.6 The proposed
rule would distinguish between four
risk-based categories for holding
companies. Three of these categories—
‘‘global systemically important BHCs,’’
‘‘Category II bank holding companies,’’
and ‘‘Category III bank holding
companies’’—would be required to
conduct company-run stress tests.
Category I holding companies and
Category II holding companies would be
required to conduct company-run stress
tests annually, while Category III
holding companies would be required to
conduct company-run stress tests
biennially.7
VerDate Sep<11>2014 15:51 Oct 23, 2019 Jkt 250001 PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 E:\FR\FM\24OCR1.SGM 24OCR1
khammond on DSKJM1Z7X2PROD with RULES
5 One commenter recommended that the FDIC,
OCC, and FRB (agencies) not include the adverse
scenario in the 2019 stress tests. The FDIC did not
consider it necessary to do so, and notes that the
EGRRCPA amendments to the Dodd-Frank Act’s
company-run stress testing requirements are
effective November 24, 2019.
6 See ‘‘Prudential Standards for Large Bank
Holding Companies and Savings and Loan Holding
Companies,’’ 83 FR 61408 (Nov. 29, 2018).
7 A Category III holding company would be a
holding company that is not a Category II holding
company and that has (1) $250 billion or more in
average total consolidated assets or (2) $100 billion
reservation of authority. The proposed
rule also included certain provisions
initially proposed in the April 2018
NPR, such as extending the as-of date
range for trading and counterparty
components for covered banks with
significant trading activities.
The FDIC received six comments in
response to the proposed rule. With
respect to raising the applicability
threshold from $10 to $250 billion,
some commenters supported raising the
threshold, others acknowledged that
such a revision was statutorily required,
and others expressed concern that
eliminating stress testing requirements
for banks under $250 billion may raise
prudential concerns. Similarly, some
commenters supported the proposed
rule’s elimination of the ‘‘adverse’’
scenario, positing that the adverse
scenario is of limited utility,5 some
acknowledged that removing the
‘‘adverse’’ scenario is statutorily
required, and others expressed concern
that eliminating the ‘‘adverse’’ scenario
may reduce the efficacy of company-run
stress testing. The FDIC appreciates the
concerns raised by commenters, but
does not believe that they warrant
changes to the proposal, and is
finalizing without change the proposal
to align the regulatory threshold for
company-run stress testing by covered
banks with the statutory threshold of
$250 billion established by section 401
of EGRCCPA, and to eliminate the
‘‘adverse’’ scenario requirement,
consistent with section 401 of
EGRCCPA.
With respect to the proposed rule’s
requirement that covered banks
generally be subject to biennial stress
testing, some commenters supported
biennial stress testing as being an
appropriate frequency for most covered
banks, while others contended that
reducing the frequency from annual to
biennial would not be appropriate.
Among the concerns highlighted by
these commenters was that such a
reduction in the frequency of stress
testing could lead to complacency by
covered banks in managing risk, and
that biennial stress tests would not be
sufficiently current to be credible. One
commenter specifically suggested that a
data-driven empirical analysis should
support the change from annual to
biennial stress testing, and that biennial
stress testing would not be appropriate
since firms make choices about
dividends and repurchases on an annual
basis. This commenter also suggested
that the risks associated with reducing
the frequency of stress testing would be
amplified by other regulatory proposals
addressing capital and liquidity
requirements.
Based on its experience in overseeing
and reviewing the results of company-
run stress testing, the FDIC believes that
biennial stress testing would be
appropriate under most conditions for
covered banks. The FDIC expects
biennial stress testing to sufficiently
satisfy the purposes of stress testing,
including assisting in an overall
assessment of a covered bank’s capital
adequacy, identifying risks and the
potential impact of adverse financial
and economic conditions on a covered
bank’s capital adequacy, and
determining whether additional
analytical techniques and exercises
would be appropriate for a covered bank
to employ in identifying, measuring,
and monitoring risks to the soundness
of the covered bank. In addition, the
FDIC would continue to review the
covered bank’s stress testing processes
and procedures. Under the final rule, all
covered banks that conduct stress tests
on a biennial basis are required to
conduct stress tests in the same
reporting year (i.e., the reporting years
for biennial stress testing covered banks
would be synchronized). By requiring
these covered banks to conduct their
stress tests in the same reporting year,
the final rule allows the FDIC to make
comparisons across banks for
supervisory purposes and assess
macroeconomic trends and risks to the
banking industry. The FDIC also notes
that it retains the ability to require more
frequent stress testing pursuant to its
reservation of authority under 12 CFR
325.1(c).
IV. Final Rule
The FDIC is adopting without change
the proposed revisions to the FDIC’s
stress testing rule, as described in detail
below.
A. Covered Banks
Section 401 of EGRRCPA amended
section 165 of the Dodd-Frank Act by
raising the minimum asset threshold for
banks required to conduct stress tests
from $10 billion to $250 billion. The
final rule implements this change by
eliminating the two existing
subcategories of ‘‘covered bank’’—‘‘$10
to $50 billion covered bank’’ and ‘‘over
$50 billion covered bank’’—and revising
the term ‘‘covered bank’’ to mean a state
nonmember bank or state savings
association with average total
consolidated assets that are greater than
$250 billion. In addition, the final rule
makes certain technical and conforming
changes to 12 CFR part 325 in order to
consolidate requirements, such as those
related to reporting and publication,
that are currently referenced separately
with respect to $10 billion to $50 billion
covered banks and over $50 billion
covered banks.
B. Frequency of Stress Testing
Section 401 of EGRRCPA also
changed the requirement under section
165 of the Dodd-Frank Act to conduct
stress tests from ‘‘annual’’ to ‘‘periodic.’’
Consistent with proposals by the Board
and the OCC, the final rule provides
that, in general, an FDIC-supervised
institution that is a covered bank as of
December 31, 2019, is required to
conduct, report, and publish a stress test
once every two years, beginning on
January 1, 2020, and continuing every
even-numbered year thereafter (i.e.,
2022, 2024, 2026, etc.). The final rule
also adds a new defined term,
‘‘reporting year,’’ to the definitions at 12
CFR 325.2. A covered bank’s reporting
year is the year in which a covered bank
must conduct, report, and publish its
stress test. As noted above, the
‘‘reporting year’’ for most covered banks
would generally be every even-
numbered year.
Certain covered banks may be
required to conduct stress tests annually
under the final rule. This subset of
covered banks is limited to those that
are consolidated under holding
companies that are required to conduct
stress tests more frequently than once
every other year. On November 29,
2018, the Board published a proposed
rule that would establish risk-based
categories for determining the
application of prudential standards,
including stress testing.6 The proposed
rule would distinguish between four
risk-based categories for holding
companies. Three of these categories—
‘‘global systemically important BHCs,’’
‘‘Category II bank holding companies,’’
and ‘‘Category III bank holding
companies’’—would be required to
conduct company-run stress tests.
Category I holding companies and
Category II holding companies would be
required to conduct company-run stress
tests annually, while Category III
holding companies would be required to
conduct company-run stress tests
biennially.7
VerDate Sep<11>2014 15:51 Oct 23, 2019 Jkt 250001 PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 E:\FR\FM\24OCR1.SGM 24OCR1
khammond on DSKJM1Z7X2PROD with RULES