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Fed releases report card on capital plans of big banks

Joe Mont | June 29, 2016

Think of it as the Federal Reserve’s report card for big banks. On Wednesday it released its assessment of the capital plans submitted by 33 bank holding companies.

The Comprehensive Capital Analysis and Review annually assesses whether BHCs with $50 billion or more in total consolidated assets have effective capital planning processes and sufficient capital to absorb losses during stressful conditions, while meeting obligations to creditors and counterparties and continuing to serve as credit intermediaries.

Thirty of the plans passed muster with no objections. The Federal Reserve is, however, requiring Morgan Stanley to submit a new capital plan by the end of the fourth quarter of 2016 to address identified weaknesses in its capital planning processes.

The plans submitted by Deutsche Bank and Santander both faced objections based on qualitative concerns. If the Federal...

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