Fed Alert! Federal Reserve Board announces the individual capital requirements for all large banks, effective on October 1
Following its stress test earlier this year, the Federal Reserve Board on Thursday announced the individual capital requirements for all large banks, effective on October 1. Those capital requirements ensure that the large banks tested will hold roughly $1 trillion in high-quality capital—enough to survive a severe recession and still be able to lend to households and businesses.
Large bank capital requirements are in part determined by the Board's stress test results, which provide a risk-sensitive and forward-looking assessment of capital needs. The below table shows the total common equity tier 1, or CET1, capital requirements for each bank, which is made up of several components, including:
Minimum capital requirement, which is the same for each firm and is 4.5 percent;
The stress capital buffer, or SCB, requirement, which is determined from the stress test results, and is at least 2.5 percent; and
If applicable, a capital surcharge for global systemically important banks, or G-SIBs, which is at least 1.0 percent.
The Board also affirmed the stress test results for one bank that requested reconsideration, HSBC North America Holdings Inc. The reconsideration process involved an independent group—separate from the stress testing group—that analyzed and evaluated the results. While affirming HSBC's stress test results for this cycle, the Board also directed the staff to conduct a closer examination of issues raised in the reconsideration process to inform continuing improvements in its stress testing methodology for next year's stress tests.
Large Bank Capital Requirements - August 2021
Under the Federal Reserve Board’s capital framework for bank holding companies and U.S. intermediate holding companies with $100 billion or more in total consolidated assets, capital requirements are in part determined by the supervisory stress test results. Table 1 shows the total common equity tier 1 (CET1) capital requirement for each large bank, which is made up of several components, including
- a minimum CET1 capital requirement of 4.5 percent, which is the same for each bank;
- the stress capital buffer (SCB) requirement, which is determined from the supervisory stress test results and is at least 2.5 percent;1 and
- if applicable, a capital surcharge for global systemically important banks (G-SIBs), which is at least 1.0 percent.
| Bank | Minimum CET1 capital ratio | Stress capital buffer requirement | G-SIB surcharge***** | CET1 capital requirement |
|---|---|---|---|---|
| Ally Financial Inc.† | 4.5 | 3.5 | n/a | 8.0 |
| American Express Company† | 4.5 | 2.5 | n/a | 7.0 |
| Bank of America Corporation | 4.5 | 2.5 | 2.5 | 9.5 |
| The Bank of New York Mellon Corporation | 4.5 | 2.5 | 1.5 | 8.5 |
| Barclays US LLC | 4.5 | 3.6 | n/a | 8.1 |
| BMO Financial Corp. | 4.5 | 3.0 | n/a | 7.5 |
| BNP Paribas USA, Inc.† | 4.5 | 6.4 | n/a | 10.9 |
| Capital One Financial Corporation | 4.5 | 2.5 | n/a | 7.0 |
| Citigroup Inc. | 4.5 | 3.0 | 3.0 | 10.5 |
| Citizens Financial Group, Inc.† | 4.5 | 3.4 | n/a | 7.9 |
| Credit Suisse Holdings (USA), Inc. | 4.5 | 6.9 | n/a | 11.4 |
| DB USA Corporation | 4.5 | 4.5 | n/a | 9.0 |
| Discover Financial Services† | 4.5 | 3.6 | n/a | 8.1 |
| DWS USA Corporation | 4.5 | 7.2 | n/a | 11.7 |
| Fifth Third Bancorp† | 4.5 | 2.5 | n/a | 7.0 |
| The Goldman Sachs Group, Inc. | 4.5 | 6.4 | 2.5 | 13.4 |
| HSBC North America Holdings Inc. | 4.5 | 7.5 | n/a | 12.0 |
| Huntington Bancshares Incorporated† | 4.5 | 2.5 | n/a | 7.0 |
| JPMorgan Chase & Co. | 4.5 | 3.2 | 3.5 | 11.2 |
| KeyCorp† | 4.5 | 2.5 | n/a | 7.0 |
| M&T Bank Corporation† | 4.5 | 2.5 | n/a | 7.0 |
| Morgan Stanley | 4.5 | 5.7 | 3.0 | 13.2 |
| MUFG Americas Holdings Corporation | 4.5 | 3.3 | n/a | 7.8 |
| Northern Trust Corporation | 4.5 | 2.5 | n/a | 7.0 |
| The PNC Financial Services Group, Inc | 4.5 | 2.5 | n/a | 7.0 |
| RBC US Group Holdings LLC | 4.5 | 3.4 | n/a | 7.9 |
| Regions Financial Corporation | 4.5 | 2.5 | n/a | 7.0 |
| Santander Holdings USA, Inc.† | 4.5 | 2.5 | n/a | 7.0 |
| State Street Corporation | 4.5 | 2.5 | 1.0 | 8.0 |
| TD Group US Holdings LLC | 4.5 | 2.5 | n/a | 7.0 |
| Truist Financial Corporation | 4.5 | 2.5 | n/a | 7.0 |
| UBS Americas Holding LLC | 4.5 | 7.1 | n/a | 11.6 |
| U.S. Bancorp | 4.5 | 2.5 | n/a | 7.0 |
| Wells Fargo & Company | 4.5 | 3.1 | 2.0 | 9.6 |
* The G-SIB surcharge is updated annually in the first quarter.
† Firm did not participate in DFAST 2021. The SCB requirement is based on DFAST 2020 results.
n/a Not applicable.
