Fed’s SCB proposal would blunt 2025 DFAST relief
Two-year average would raise CET1 component due to weaker 2024 stress test results
A Federal Reserve proposal aimed at reducing volatility in stress capital buffers (SCBs) would have raised the Common Equity Tier 1 (CET1) component of the SCB for 20 of the 22 banks in this year’s Dodd Frank Act stress tests (DFAST), Risk Quantum analysis shows.
Announced on April 17, the proposal would revise the SCB framework by basing the buffer’s CET1 component on the average DFAST
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