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Unanswered Questions: 2015 CCAR Results

On March 18, S&P Capital IQ hosted the latest webinar of the Risk Insight series, 2015 CCAR Results: What They Mean and the Way Forward. During this webinar, panelists from S&P Capital IQ and the Exequor Group broke down the 2015 Comprehensive Capital Analysis and Review (CCAR) results, released on Wednesday, March 11, for the 31 participating Bank Holding Companies (BHCs). During the webinar, we asked participants live poll questions that revealed very insightful responses.

The first poll question we asked was, “What is your greatest challenge during the CCAR process?” The leading responses were “Evolving regulation” and “Data needs”. In hindsight, these answers were not surprising given that the leading response, Evolving regulation, fits one of the stronger themes of the CCAR process of “Raising the Bar,” or making the CCAR testing less predictable. The second highest response was about data needs. The importance of good data as the starting point for model development and validation is fairly obvious, but clearly a concern was identified by these poll results below. 

S&P Capital IQ Webinar: “2015 CCAR Results: What They Mean and the Way Forward”

Source: S&P Capital IQ Webinar: “2015 CCAR Results: What They Mean and the Way Forward” – March 18, 2015

The next poll question really cuts to the chase of the overall CCAR results and that is “What do you consider the most noteworthy event from the 2015 CCAR results”. The leading response was “For the first time, all 31 banks passed the quantitative test”. For the past 5 years, there has always been at least one bank that failed to pass the quantitative portion of the Stress Tests. Not this year. And there seems to be a growing expectation that this might be the norm going forward assuming the economy remains stable. The other leading response, “Increasing emphasis on the qualitative components” demonstrates how the CCAR tests continue to evolve. Whereas the quantitative portion is becoming increasingly predictable, you can say that is not the case for the qualitative component. In fact, you can argue the qualitative are becoming even less predictable.  

S&P Capital IQ Webinar: “2015 CCAR Results: What They Mean and the Way Forward”

Source: S&P Capital IQ Webinar: “2015 CCAR Results: What They Mean and the Way Forward” – March 18, 2015

The final poll question was “How do you see the regulatory landscape evolving over the next three to five years?” The consensus was that regulations will continue to increase or level off. My favorite response though was “Depends on who is in the White House.”

Check out this video to discover more poll insights, as well as some of the unanswered questions from the webinar.

Click here to view the webinar replay.

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