Fed Close to Marrying Bank Stress Tests to Daily Capital Demands
- Quarles says the ‘stress capital buffer’ is nearly finalized
- Capital overhaul aims to simplify Wall Street requirements
The Federal Reserve building.
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The Federal Reserve’s regulatory chief said the agency is close to finalizing a “stress capital buffer” that could ease some of Wall Street’s biggest gripes about annual stress tests while boosting overall capital demands at the largest banks.
The new measure will meld stress-test targets with day-to-day capital minimums, Randal Quarles, the Fed’s vice chairman for supervision, said Thursday in remarks prepared for a European Central Bank event in Frankfurt. The Fed may also propose re-hashing another buffer meant to amp up capital when risk of a downturn is highest, Quarles said.