DFAST
Foreign banks see steeper CET1 declines in US and EU stress tests
Strong starting capital buffers at overseas subsidiaries eroded by outsized hits
US Fed urged to curb reliance on its own stress-test models
Original architect of DFAST says supervisors should stop putting all their eggs in one basket
Barr slams weakening of bank supervisory tests
Fed governor warns deregulation during boom times ushers in crises
Citi leads US banks in lowballing capital hit in stress test
Morgan Stanley and Wells Fargo internal projections also show more capital resilience than Fed’s calculations
Foreign dealers still lag US banks in stress tests
IHCs’ CET1 depletion triples that of domestic participants, despite improved performance since 2024 exercise
Fed’s SCB proposal would blunt 2025 DFAST relief
Two-year average would raise CET1 component due to weaker 2024 stress test results
Softer DFAST market shock favours Goldman but confounds comparability
Tweak to trading book test reveals widening gap between bank and Fed loss forecasts
JPM, Wells Fargo would net record AOCI windfalls in severe recession
Latest DFAST projects $58bn AOCI rebound on aggregate, with two banks driving over 60% of the recovery
JP Morgan’s loan losses loom ever-larger in Fed stress test
$90 billion in projected markdowns accounts for almost a fifth of total across 22 banks
Seven banks fall short of full capital buffers in DFAST 2025
DB USA posts largest gap, with four G-Sibs also dipping below their full requirements
DFAST at a turning point, but which way is forward?
Banks sniff an opportunity to push the Fed for more openness over stress test models – and seize capital benefits
Fed agrees to unveil stress-test models in transparency U-turn
US regulator commits to September 30 deadline for new measures
Fed’s proposed SCB tweak would free $20bn of capital at US banks
Averaging of stress test-based inputs over two years would reduce current add-ons by up to 60bp
Bowman won’t commit to stress-testing the tariff shock
Nominated Fed vice-chair stonewalls calls to run ad hoc scenario similar to 2020 Covid test
CCAR methodology may give first glimpse of Fed’s transparency drive
Industry calls for more details on global market shock and new private equity treatment
Fed’s NBFI scenario may be more use than CCAR – experts
Main severely adverse scenario does not capture contagion risks from any squeeze on non-banks
Looming US Basel endgame redraft sparks calls to save IRB
Experts say 20 years of data makes credit risk models more appropriate than standardised approach
What Goldman’s appeal victory means for Fed stress tests
Decision could embolden more banks to appeal, analysts say. But others believe result is one-off
Fed hikes stress capital buffers for 18 US banks
Nine dealers face record-high SCBs as poor performance in latest DFAST weighs on capital requirements
Progress on US banks’ EVE transparency grinds to a halt
No additional disclosures of key metric linked to SVB collapse in latest round of public filings
Why was Archegos worse than the Fed’s five-fund stress test?
Some believe Credit Suisse was an outlier, but others say the CCAR results underestimated risks
US banks’ stress test accuracy worsens in DFAST 2024
Gap between Fed’s and large dealers’ projections widens to six-year high
Fed urged to introduce annual high-rate stress tests
Results of debut scenario were reassuring, but regulators cannot lower their guard
US banks’ performance in latest DFAST worst in six years
Fed blames higher credit card delinquencies, riskier corporate lending and lower revenue