RiskTech Forum

SAS: CCAR: An Appraisal Of Current Practices

Posted: 1 August 2014  |  Source: SAS


Overview
Since the Federal Reserve’s introduction of the Comprehensive Capital Analysis and Review (CCAR) process in 2010, supervisory expectations for all aspects of capital requirements have been significantly heightened for the largest and most complex US banks. In its CCAR 2013 review document (August 2013), the Fed cited current practices by bank holding companies (BHCs) as well as outlined best and suboptimal practices. Many of SAS’ bank customers must now adhere to an even more stringent requirement for creation of a sound and robust capital planning and stress testing program.

In our research of those customers’ current practices, a pattern of issues emerged:

This paper highlights how banks are addressing these issues and what they recommend to support current industry practices for risk process management and governance; scenario development; modeling; board management and engagement; and documentation. The observations are based on the report Dodd-Frank Act Stress Test 2014: Supervisory Stress Test Methodology and Results (DFAST 2014), which focused on the assessment framework used to review the capital plans from both quantitative and qualitative perspectives as well as interactions with most of the top 30 CCAR and DFAST (Dodd-Frank Act Stress Test) banks under the Fed or Office of Comptroller of Currency’s (OCC) supervision.

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