Fed issues capital requirements for all large banks

The Federal Reserve Board on Wednesday announced final individual capital requirements for all large banks, effective on October 1.

Large bank capital requirements are informed by the Board's stress test results, which provide a risk-sensitive and forward-looking assessment of capital needs. The table in the Large Bank Capital Requirements document shows each bank's common equity tier 1 capital requirement, which is made up of several components, including:

• The minimum capital requirement, which is the same for each bank and is 4.5 percent;
• The stress capital buffer requirement, which is based in part on the stress test results and is at least 2.5 percent; and
• If applicable, a capital surcharge for the largest and most complex banks, which is updated in the first quarter of each year to account for the overall systemic risk of each of these banks.

If a bank's capital dips below its total requirement, the bank is subject to automatic restrictions on both capital distributions and discretionary bonus payments.

The Board also announced that it had modified the stress capital buffer requirement for Goldman Sachs, after the firm's request for reconsideration.