Fed Issues Large Bank Capital Requirements

The Federal Reserve today issued individual capital requirements, taking effect Oct. 1, for banks with more than $100 billion in total assets. The common equity tier 1 capital requirement calculation is the sum of the minimum CET1 capital ratio of 4.5%, a stress capital buffer based on the results of this year’s stress tests and, for the eight U.S. global systemically important banks, a GSIB surcharge starting at 1%.

The stress capital buffers ranged from 2.5%, the minimum, up to 7.8%. For banks subject to these requirements, the combined CET1 capital levels ranged from 7% to 13.7%. The Fed also said that it reaffirmed the original stress test results for five firms that had requested reconsideration by an independent group.