About the CCAR Methodology Study 2023
ORX’s CCAR methodology study provides insight on firms’ practices and key industry trends relating to the Comprehensive Capital Analysis and Review (CCAR) process.
This is the second phase of our 2023 CCAR research programme, focusing on firms’ CCAR methodologies. This study complements the quantitative study which ran over H1 2023 and benchmarked firms’ key loss ratios, material risk and scenario practices, and loss projection inputs for the 2023 CCAR exercise.
More about this year's study
This year, the methodology study will focus on four key elements that were nominated by the CCAR Community as part of the June 2023 Community call:
- Optimised Risk Management and CCAR resourcing: ‘Optimised Risk Management’ refers to ongoing efforts to make the CCAR process more efficient and streamline 1st and 2nd line activities. This section aims to explore how the CCAR process is resourced and how firms have attempted to streamline and optimise related activities.
- Active Risk Management and CCAR: ‘Active Risk Management’ refers to greater involvement by the 2nd line in active risk management activities, with the function acting as both an oversight function and business partner to support the 1st line. This section aims to capture how the CCAR process may support firms’ wider risk management activities.
- Regression Modelling: an exploration of practices relating to regression modelling, risk segmentation and linkages to macro factors for the CCAR process.
- Climate Risk and CCAR: this section aims to capture the range of practices around climate risk and how this is considered within CCAR, including definitions of climate risk, modelling approaches and challenges.
Why take part?
By taking part, you can help build a picture of current best practices in the CCAR space, and gain unique insight into how peer firms are approaching the exercise and unlocking additional value from the CCAR process. ORX will have the opportunity to analyse trends and practices on both an industry-wide, and CCAR submission category-specific basis.
The results of this survey will be used to feed into the upcoming in-person CCAR Roundtable, which is taking place in Boston on 18 October 2023, helping guide a portion of the discussions.
What will the outputs be?
ORX will produce a summary report highlighting reported practices. This will provide CCAR practitioners with a view of how peers are responding to the challenges in the four key areas of CCAR methodology nominated by the CCAR Community.
This report is expected to be supplemented with anonymized findings from the 2023 Boston roundtable, providing a complete picture of current best practices.
This study is open to the CCAR Community
Find out more about how you can join the ORX CCAR Community.
Research Manager, ORX
Head of Risk Measurement, ORX