Smaller banks granted stress test reprieve
The Fed is giving the little guy extra breathing room, and is not requiring smaller banks to meet all of the new capital rules during the next round of Federal Reserve stress tests. Per Bloomberg:
Allowing smaller banks to use current capital rules should give them “time to adjust their internal systems,” the Fed said. At the largest lenders, capital adequacy will still be assessed using the same minimum 5% tier 1 common ratio as in earlier stress tests and capital plans, “ensuring consistency with those previous exercises,” the Fed said.