FRB Releases Large Bank Capital Requirements

The Federal Reserve Board ("FRB") released the individual capital requirements for large banks. The requirements will take effect on October 1, 2025. 

The FRB stated that the large bank capital requirements, informed by supervisory stress test results, include (i) a minimum common equity tier 1 ("CET1") capital requirement of 4.5 percent, (ii) a stress capital buffer ("SCB") of at least 2.5 percent informed by supervisory stress test results, and (iii) for the largest and most complex firms, a capital surcharge for global systemically important banks. The common equity tier 1 capital requirements for the covered bank holding companies and intermediate holding companies range from 7.0 to 16.0 percent.

The FRB noted that, in April, it proposed a rule to average stress test results over two consecutive years in order to reduce volatility in annual capital requirements. (See previous coverage.) The FRB stated that, if finalized, the revised framework would average the 2024 and 2025 stress test results, with updated capital requirements to be published separately.