The Comprehensive Capital Analysis and Review (CCAR) is an annual supervisory exercise run by the U.S. Federal Reserve to evaluate whether the largest bank holding companies have sufficient capital to continue operating and lending during severe economic and financial stress. It was introduced in 2011 in the wake of the 2007–2009 financial crisis and the 2009 Supervisory Capital Assessment Program (SCAP), which had served as the prototype stress test.
CCAR has two intertwined components:
- A quantitative assessment in which the Fed projects each firm's revenues, losses, reserves, and post-stress capital ratios under hypothetical scenarios (typically a baseline, adverse, and severely adverse macro scenario) over a nine-quarter horizon.
- A qualitative assessment of the firm's internal capital planning process, governance, risk identification, and controls. The qualitative objection was removed for most domestic firms in 2017–2019 but retained for certain large foreign banking organizations.
Banks must submit a capital plan (Form FR Y-14) describing planned dividends, share repurchases, and other capital actions. The Fed can object to the plan, which historically prevented firms from increasing distributions to shareholders. Notable objections include Citigroup in 2012 and 2014, and the U.S. units of Deutsche Bank and Santander in 2015 and 2016.
CCAR overlaps with the Dodd-Frank Act Stress Tests (DFAST), mandated by Section 165 of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, but DFAST uses a standardized capital action assumption while CCAR uses each firm's own planned actions. Following the 2019 tailoring rules and the introduction of the Stress Capital Buffer (SCB) in March 2020, CCAR results now directly feed into each firm's binding capital requirements rather than functioning as a pass/fail gate on dividends.
Coverage thresholds have shifted over time; under current tailoring categories, firms with $100 billion or more in consolidated assets are subject to supervisory stress testing, though frequency varies by category.
Example
In 2020, the Federal Reserve's CCAR results led it to cap dividends and suspend share buybacks at the 33 largest U.S. banks, citing pandemic-related uncertainty.
Frequently asked questions
DFAST is a statutory stress test under the Dodd-Frank Act using standardized capital action assumptions, while CCAR layers on a review of each firm's own planned dividends and buybacks and its capital planning process.
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