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Agencies finalize large stress testing guidance

On May 14, the Federal Reserve Board, the Federal Deposit Insurance Agency, and the Office of the Comptroller of the Currency stated in a press release the final supervisory guidance regarding stress-testing practices at banking organizations with total consolidated assets of more than $10 billion.

The guidance emphasizes the importance of stress testing as a part of risk management within banking organizations. The guidance provides a strategy for a stress testing framework that includes various stress testing methods and how the methods should be implemented through the different levels of an organization.

However, the guidance does not implement the stress testing requirements in the Dodd-Frank Act or in the Federal Reserve Board's capital plan rule. Those requirements will be implemented by the agencies through seperate proposals.

Click here to read the press release.

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