On August 28, the Fed released its final capital requirements for large bank holding companies. As previously covered by InfoBytes, the Fed derived these requirements from stress test results showing that large banks had “sufficient capital” to absorb losses and withstand a recession. Each large bank’s total common equity tier 1 (CET1) capital must include:
- A minimum CET1 capital ratio of 4.5 percent;
- A stress capital buffer requirement of at least 2.5 percent, which was determined, in part, on the results of the supervisory stress test; and
- A 1.0 percent capital surcharge for each bank deemed a global systemically important bank (G-SIB).
A table on the final page displayed all banks’ requirements. The requirements will take effect on October 1.
