CCAR Benchmark 2020

Benchmark - Jan 2021

The Comprehensive Capital Analysis and Review (CCAR) is an annual exercise conducted under the supervision of the US Federal Reserve Board (FRB).

The purpose is to assess financial robustness of bank holding companies (BHCs), which have been identified as economically significant to the US economy. The assessment looks at the capital adequacy under three different financial scenarios: baseline, adverse and severely adverse.

A new and developing factor in this year’s exercise is the global coronavirus pandemic, which just began to take shape in the US during the CCAR cycle. On June 25th, the FRB released the results of this year’s CCAR exercise. In addition to the results of the exercise based on the scenarios released earlier this year, the FRB also released a publication with details of a sensitivity analysis carried out in light of the pandemic. 

FRB announces second CCAR submission

Included in the publication of this sensitivity analysis was an announcement that the FRB will shortly release new scenarios based on potential trajectories of economic recovery. Upon release of these new variables, participating banks will be required to update and resubmit CCAR within 45 days.

ORX extends this year's benchmark in response

Following the FRB's announcement, we decided to hold a short follow-up study later this year and to continue hosting regular working group calls throughout 2020 to support our CCAR community with the challenges of an unprecedented second CCAR submission.