Via FDIC Overview – “Section 165(i)(2) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) requires state nonmember banks and state savings associations with total consolidated assets of more than $10 billion to conduct annual stress tests. On October 15, 2012, the FDIC published its final annual stress test rule (Part 325), which set out definitions and rules for scope of application, scenarios, reporting, and disclosure. On November 21, 2014, the FDIC published final rules to adjust the timing of the annual stress testing cycle and to clarify the method used to calculate regulatory capital in the stress tests. Beginning in 2016, all covered institutions, as defined in the final rule, with between $10 and $50 billion in assets are required to submit the results of their company-run stress tests to the FDIC by July 31 and publish those results between October 15 and October 31. Covered institutions with $50 billion in assets or more are required to submit the results of their company-run stress tests to the FDIC by April 5 and publish those results between June 15 and July 15. The FDIC will provide the required scenarios to the covered institutions by February 15 of each year. The results of the company-run stress tests provide the FDIC with forward-looking information used in bank supervision and will assist the agency in assessing the company’s risk profile and capital adequacy. The objective of the annual company-run stress test is to ensure that institutions have robust, forward-looking capital planning processes that account for their unique risks, and to help ensure that institutions have sufficient capital to continue operations throughout times of economic and financial stress. These stress test results are also expected to support ongoing improvement in a covered institution’s stress testing practices with respect to its internal assessments of capital adequacy and overall capital planning.”
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