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Proposed Interagency Guidance on Company-Run Stress Tests

Capital
August 9, 2013
Summary: The federal banking agencies are issuing proposed interagency stress-testing guidance outlining principles for implementation of stress tests as mandated by Section 165(i)(2) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA). This guidance is applicable to all FDIC-supervised banks and savings associations with at least $10 billion but less than $50 billion in total consolidated assets. The guidance sets forth supervisory expectations for DFA stress-test practices and provides information about methodologies these institutions should use.

Statement of Applicability to Institutions Under $1 Billion in Total Assets: This Financial Institution Letter is not applicable to FDIC-supervised banks and savings associations with total assets less than $1 billion.

Highlights:

  • The proposed guidance describes supervisory expectations for DFA stress-testing practices for institutions with total consolidated assets between $10 billion and $50 billion.
  • The proposed guidance underscores the importance of stress testing as an ongoing risk management practice that supports an institution's forward-looking assessment of its risks and better equips the institution to address a range of macroeconomic and financial outcomes.
  • The proposed guidance provides additional details to help these companies conduct stress tests based on their size, complexity, risk profile, business mix, and market footprint.

Distribution:
FDIC-Supervised Banks (Commercial and Savings)

Suggested Routing:
Chief Executive Officer
Chief Financial Officer
Chief Risk Officer

Note:
FDIC Financial Institution Letters (FILs) may be accessed from the FDIC's Web site at www.fdic.gov/news/financial-institution-letters/2013/index.html .

To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html .

Paper copies may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (877-275-3342 or 703-562-2200).

Additional Related Topics:

  • Administrative Practice and Procedure, Banks, Banking, Reporting and Recordkeeping Requirements, State Savings Associations, Stress Tests
FIL-37-2013
Attachment(s)
Contact(s)
Ryan Sheller, Senior Large Financial Institution Specialist, (202) 412-4861
Mark Flanigan, Counsel, (202) 898-7426

Last Updated: August 9, 2013