The proposed rule:
Defines "stress test" as a process to assess the potential impact of economic and financial conditions on the earnings, losses, and capital of a covered bank over a nine- quarter planning horizon, taking into account the current condition of the bank and its risks, exposures, strategies, and activities.
Requires covered state nonmember banks to conduct annual capital adequacy stress tests using financial data as of September 30, based on three scenarios to be identified annually by the FDIC.
Requires covered banks to report the results of the stress tests to the FDIC by the January 5 following the September 30 as-of date, in a form to be developed in coordination with the other banking agencies that would be the subject of a future request for comment.
Requires covered banks to publish a summary of the results within 90 days after the report to the FDIC.
Requires the public summary to include projections of losses, pre-provision net revenue, loss reserves, net income, and pro forma capital levels and ratios over the planning horizon under each scenario, and a general description of the risks covered and stress testing methodologies used.
States that the FDIC intends to coordinate with the other primary federal financial regulatory agencies on the development of the scenarios.
Seeks comment on the feasibility of the proposed timelines and the challenges institutions may experience.
Comments are due by March 23, 2012.
FDIC-Supervised Banks (Commercial and Savings)
Chief Executive Officer
Chief Financial Officer
Chief Risk Officer
Administrative Practice and Procedure, Banks, Banking, Federal Deposit Insurance Corporation, Reporting and Recordkeeping Requirements, State Savings Associations, Stress Tests
Notice of Proposed Rulemaking - PDF (PDF Help)
George French, Deputy Director, Policy, (202) 898-3929; Robert Burns, Associate Director, Mid-Tier Bank Branch, (704) 333-3132; or Karl R. Reitz, Senior Capital Markets Specialist, (202) 898-6775, Division of Risk Management and Supervision
FDIC Financial Institution Letters (FILs) may be accessed from the FDIC's Web site at http://www.fdic.gov/news/news/financial/2012/index.html
To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/index.html
Paper copies may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562-2200).