Large Bank Examination Workshop February 2026

Session Objectives By the end of the session, the participants will be able to describe impact of CCAR on evaluating: • Capital adequacy • Internal capital adequacy assessment processes • Plans to make capital distributions, such as dividend payments or stock repurchases • Capital needs through a defined cycle, considering through the cycle capital needs and capital raising lead times

63

Capital Planning Issues

• Increasing Regulatory Pressure  Stress testing to be integral to capital planning and decision-making processes on stringent timelines (EBA, FSA, FRB) • Inadequacy of Silo-Approach to Managing Institutions  Inability to identify, model and reflect ripple-effect of changes across multiple disciplines and their cross-relationships • Weaknesses in Current Usage of Stress Testing  Stress testing carried out as a set of multiple, independent exercises that aren’t aligned  Results not used to drive management and capital planning processes  Inadequate scenarios – in scope, coverage, horizon, severity and rigor of assumptions • Opaque Management Systems & Processes  Lack of transparency and ability to audit  Lack of ability to prove adequacy of tests and accuracy of results

64

32

© Global Financial Markets Institute Inc.