Speech by Chairman Bernanke on stress testing banks

by Sabrina I. Pacifici on April 8, 2013

Chairman Ben S. Bernanke At the “Maintaining Financial Stability: Holding a Tiger by the Tail” financial markets conference sponsored by the Federal Reserve Bank of Atlanta, Stone Mountain, Georgia
April 8, 2013

  • “…we currently have two distinct but related supervisory programs that rely on stress testing. The first is the stress testing required by the Dodd-Frank Act, which we have shortened to the acronym DFAST–the Dodd-Frank Act stress tests. The purpose of DFAST is to quantitatively assess how bank capital levels would fare in stressful economic and financial scenarios. The second program, called the Comprehensive Capital Analysis and Review, or CCAR, combines the quantitative results from the stress tests with more-qualitative assessments of the capital planning processes used by banks. For example, under CCAR, supervisors evaluate the ability of banks to model losses for various categories of loans and securities and to estimate earnings and capital requirements in alternative scenarios. We recently completed the first set of DFAST stress tests and disclosed the results, followed a week later by the disclosure of our CCAR findings, which included our qualitative assessments of firms’ capital planning.”
  • Related postings on the financial system
  • Previous post:

    Next post: