Navigating the CCAR Process with Increased Insight

Among the sea of regulatory requirements facing US banks is the Comprehensive Capital Analysis and Review (CCAR) conducted by the Federal Reserve. This annual evaluation of bank holding companies with more than $50 billion in assets is designed to ensure that large financial institutions are adequately capitalized.

CCAR is part of a larger trend since 2008 that has seen a significant increase in the complexity and comprehensiveness of bank oversight. This trend shows no sign of abating and it means banks must employ higher levels of rigor in their compliance solutions. This is particularly true when stress tests are involved, as is the case with CCAR.

Regulators are not only interested in the results of stress tests. They also demand that models utilize trusted methodologies and yield demonstrably reliable and realistic results for given economic scenarios.