FDIC Board Proposes Stress Testing Regulation

The FDIC has approved a notice of proposed rulemaking implementing Section 165 of the Dodd-Frank Act. The proposed rule would require certain large insured institutions with assets over $10 billion to conduct annual stress tests.

The FDIC has defined stress test as:

a process to assess the potential impact of economic and financial conditions on the consolidated earnings, losses and capital of the bank over a set planning horizon, taking into account the current condition of the bank and its risks, exposures, strategies, and activities.

The proposal will be published in the Federal Register with a 60-day public comment period.

Read FDIC press release.
Read notice of proposed rulemaking.