Large Bank Examination Workshop February 2026

CCAR vs. DFAST

• Purpose and Scope: 

DFAST: Primarily focuses on assessing whether banks have enough capital to absorb losses and continue operations under severely adverse conditions. It is a forward-looking quantitative evaluation.  CCAR: In addition to the quantitative assessment similar to DFAST, CCAR evaluates the quality of the bank’s capital planning processes, including policies and strategies for managing capital under various scenarios. • Capital Planning:  DFAST: Does not assess the bank’s capital planning processes. It assumes historical dividends and other capital actions, making it more of a quantitative exercise.  CCAR: Includes a qualitative assessment of the bank’s capital planning processes, ensuring that banks have robust, forward-looking plans to manage their capital effectively. • Regulatory Requirements:  DFAST: Required for all banks with assets over $100 billion, focusing on their ability to maintain adequate capital levels under stress.  CCAR: Also required for large banks, but it integrates the stress test results with non-stress capital requirements into a comprehensive framework known as the Stress Capital Buffer (SCB). • Public Disclosure:  DFAST: Banks must publicly disclose the results of their company-run stress tests based on their risk profiles.  CCAR: The Federal Reserve publicly discloses the results of the stress tests, including both the quantitative and qualitative assessments.

101

CCAR vs. DFAST

• FRB uses a standardized set of capital actions assumptions that are specified in its DFAST regulations:  Common stock dividend payments are assumed to continue at the same level as the previous year  Scheduled payments on any other capital instruments are assumed to be paid  No repurchases of common stock  Do not include issuance of new common stock, preferred stock, or other instruments that would be included in regulatory capital, except for common stock issuance associated with expensed employee compensation

102

51

© Global Financial Markets Institute Inc.