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3 federal agencies issue Dodd-Frank stress testing guidelines for midsize institutions

March 8, 2014
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Final guidance has been issued by the Federal Reserve, the FDIC and the OCC detailing stress testing expectations and requirements for financial institutions with total assets ranging from $10-50 billion. 

These firms are obligated to perform yearly internal stress tests under guidance issued by these three agencies in 2012, to comply with provisions described in the Dodd-Frank Wall Street Reform and Consumer Protection Act. The first round of stress tests must be performed by March 31, 2014.

Since needs and requirements will differ, even among midsize institutions, the stress testing guidelines provide for flexibility to allow for differences in in risk profiles, sizes, business mixes, market footprints and complexity. The guidance instead describes general expectations and provides examples of how these expectations may be applied. 

Stress Testing: The Who, What, When and Why

The guidance also affirms that midsize firms with $10-50 billion in assets are not bound to the Federal Reserve’s Capital Plan Rule, the Federal Reserve’s annual Comprehensive Capital Analysis and Review, Dodd-Frank Act supervisory stress tests, or related data collections.

For more information on stress testing approaches and methodologies, download the whitepaper Stress Testing: The Who, What, When and Why.

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