The Comprehensive Capital Analysis and Review (CCAR) is an annual exercise by the Federal Reserve to assess whether the largest bank holding companies operating in the United States have sufficient capital to continue operations throughout times of economic and financial stress and that they have robust, forward-looking capital-planning processes that account for their unique risks.
As part of this exercise, the Federal Reserve evaluates institutions’ capital adequacy, internal capital adequacy assessment processes, and their individual plans to make capital distributions, such as dividend payments or stock repurchases. – United States Federal Reserve
There is no one who has had a career is CCAR because it was only created in 2010 and first performed in 2011. Previous to this exercise, a similar assessment was done under the name of Supervisory Capital Assessment Program (SCAP). It was performed once in 2009. SCAP was inspiration for CCAR, which is not performed yearly in the first quarter. The Federal reserve are in constant discussions about the test during the process and provides a previous of the assessment in March to the banks that are involved in the assessment. There are 31 banks that must participate in CCAR. Participation primarily has to do with size and market reach because CCAR is testing the financial system’s ability avoid a bank crisis.
About the Author: Marcus Maltempo is a compliance professional with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses.