Goldman, Morgan Stanley push for CCAR changes

Balance sheets will shrink in a crisis, not grow, trading houses argue

Goldman Sachs
Goldman Sachs: static balance sheet would penalise banks dependent on trading

The Federal Reserve has proposed relaxing its supervisory assumption that bank balance sheets will grow under stress, but Goldman Sachs and Morgan Stanley would like it to go even further by permitting balance sheets to shrink.

The investment banks called for the change in comment letters on the Fed’s stress capital buffer proposal, which the central bank began consulting on in April. The SCB is the centrepiece of a proposal to better align its Comprehensive Capital Analysis and Review (CCAR) p

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