Comprehensive_Capital_Analysis_and_Review
Comprehensive Capital Analysis and Review
United States regulatory framework
Comprehensive Capital Analysis and Review (CCAR) is a United States regulatory framework introduced by the Federal Reserve in 2009[1] to assess, regulate, and supervise large banks and financial institutions – collectively referred to in the framework as bank holding companies (BHCs). It was an extension of the stress tests performed during the financial crisis of 2007–2008.
This article possibly contains original research. (June 2015) |
The assessment is conducted annually and comprises two related programs:
- Comprehensive Capital Analysis and Review
- Dodd–Frank Act supervisory stress testing
The core part of the program assesses whether:
- BHCs possess adequate capital.
- The capital structure is stable given various stress-test scenarios.
- Planned capital distributions, such as dividends and share repurchases, are viable and acceptable in relation to regulatory minimum capital requirements.
The assessment is performed on both qualitative and quantitative bases. The Federal Reserve may order banks to suspend their planned capital distributions to shareholders until the target capital balance is restored.