Federal Register: FRB Simplifies Capital Rules for Big Banks

The Federal Reserve Board ("FRB") final rule to (i) simplify the requirements for large banks subject to capital plan rules and (ii) implement a stress capital buffer requirement was published in the Federal Register. The effective date for the final rule is May 18, 2020; a firm's first stress capital buffer requirement will be effective on October 1, 2020.

As previously covered, the final rule will amend capital plan rules' requirements to (i) maintain or increase the capital required for global systemically important banks ("GSIBs") and (ii) decrease the capital required for non-GSIBs. Additionally, the FRB will tailor the stress capital buffer requirement to each firm by using the results of its supervisory stress test. This will replace the current capital conservation buffer requirement.