CCAR is the Federal Reserve's annual supervisory exercise that evaluates whether the largest U.S. bank holding companies have enough capital to keep lending during severe economic and financial stress, and whether their internal capital planning processes are sound. It was launched in 2011 in the wake of the 2007-2009 financial crisis, building on the one-off Supervisory Capital Assessment Program (SCAP) of 2009.
Each year the Fed publishes macroeconomic scenarios — typically a baseline, an adverse (since discontinued in some cycles), and a severely adverse scenario — covering variables such as GDP growth, unemployment, equity prices, house prices, and interest-rate paths. Large banks must project nine quarters of revenues, losses, reserves, and resulting regulatory capital ratios under each scenario. Firms with significant trading or counterparty exposure also face a global market shock and a largest counterparty default component.
CCAR has two historical pillars:
- A quantitative assessment of whether post-stress capital ratios stay above regulatory minimums.
- A qualitative assessment of risk-management, internal controls, and governance around capital planning.
The qualitative objection was the Fed's most visible tool: it allowed regulators to block planned dividends and buybacks even if a bank passed numerically. Citigroup failed qualitatively in 2014, and Deutsche Bank and Santander's U.S. units failed in 2015 and 2016. The qualitative objection was removed for most domestic firms in 2017 and effectively wound down after the Fed's 2019-2020 reforms.
Since 2020, CCAR has been integrated with the Stress Capital Buffer (SCB) framework: the stress-test loss informs each firm's firm-specific capital buffer above the 4.5% CET1 minimum, replacing the old pass/fail capital-distribution regime. The Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 also raised the asset threshold for mandatory participation from $50 billion to $100 billion and tailored the frequency for mid-sized firms.
CCAR results are watched closely by markets because they directly constrain how much capital large U.S. banks can return to shareholders.
Example
In June 2023, the Federal Reserve announced that all 23 large banks tested under CCAR — including JPMorgan Chase, Bank of America, and Goldman Sachs — passed the severely adverse scenario, clearing the way for updated Stress Capital Buffer requirements.
Frequently asked questions
U.S. bank holding companies and intermediate holding companies of foreign banks with $100 billion or more in total consolidated assets, following the 2018 threshold change from $50 billion.
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