- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Aaron Nicodemus2023-02-10T18:16:00
Banking regulators unveiled new stress test requirements for the largest financial institutions, including a series of hypothetical global market shocks six banks will be required to face.
Stress tests are conducted annually by the Federal Reserve, Office of the Comptroller of the Currency (OCC), and Federal Deposit Insurance Corporation (FDIC). The regulators consult each other to develop their scenarios in accordance with the requirements of the Dodd-Frank Act.
Of 23 large banks with a global footprint being tested, 11 will be required to conduct additional tests to gauge their response to a global market shock, a counterparty default, and/or exploratory market shock, the Fed announced in its press release Thursday. The results of these tests will not contribute to the capital requirements set by this year’s stress test but instead be used by the Fed to assess a wider array of risks for use in future tests.
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The Federal Reserve Board will require more than 30 of country’s largest banks to maintain a minimum percentage of capital in reserve, a percentage which the Fed calculated based on their complexity and whether they are considered a global systemically important bank.
The White House, Department of the Treasury, and other federal banking regulators swung into action over the weekend to prevent the failure of two banks with $264 billion in combined deposits from turning into a full-blown economic crisis.
In the largest U.S. bank failure since 2008, Silicon Valley Bank was closed and its approximately $175 billion in deposits placed under control of the Federal Deposit Insurance Corporation.
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network issued an alert to financial institutions about their obligations to report deepfakes, warning artificial intelligence has given bad actors additional tools in their arsenal.
A nationwide rental outlet affiliated with Rent-a-Center and its chief executive have been sued by the Consumer Financial Protection Bureau for allegedly deceiving five million consumers about the terms of credit agreements.
A lack of risk visibility is causing companies to reject customers–and potentially lose money–over fears they might be in danger of violating rules around anti-money laundering and sanctions regulations.
