Large Bank Examination Workshop February 2026

Regulatory Feedback SCAP and ICAAP

Process Keep the process integrated • Enhance material risk identification / capture process and strengthen linkages with capital plan, strategy plan, budgets and risk appetite • Improve PPNR and loss forecasting methods • Enhance methodology for determining capital and liquidity buffers

Infrastructure Strengthen controls • Standards equivalent to COSO Internal Controls to be used for scenario / stress testing data, techniques, tools, models, processes and documentation • Manage model risk • Perform internal audit

Governance Make the challenge process effective • Board-level approval, challenge and oversight of the stress test and capital plan • Effective management review, challenge and analysis of results • Formalized roles and responsibilities with adequate resources

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Lessons Learned

• Huge time, effort and cost investment  Scope, supporting data, techniques, tools, personnel  Reconciliation to regulatory filings  Using results in key capital decisions (e.g. dividend and capital buyback programs) • Capturing the interaction between financial planning processes, capital projection and scenarios / stress-testing is difficult  Credible and consistent set of business and financial assumptions (revenue, cost, loss estimates and balance sheet) under various scenarios  Alignment of financial and risk information • Quality of ICAAP and financial planning processes make a difference  ICAAP process leveraged in stress-testing and capital planning  Ability to integrate capital and liquidity stress testing with contingency plans

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