In a Bind: How CCAR Constrains U.S. Bank Strategy

In a Bind: How CCAR Constrains U.S. Bank Strategy

By Steve Marlin
August 15, 2017, Risk

Earlier this year, a large international bank reluctantly jettisoned one of its U.S. lending portfolios. The loans were perfectly healthy and would have remained on the firm’s books were it not for the capital they required under the U.S. Federal Reserve’s Comprehensive Capital Analysis and Review (CCAR).

“We had a lending portfolio where we felt the return on a risk-adjusted basis – when you look at CCAR stressed conditions – didn’t justify the risk going forward,” says the firm’s head of stress testing.

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