U.S. banks with at least $10 billion in assets would have to perform their own tests of whether they have enough cushion to withstand losses under a proposal expected to be published Tuesday by the Federal Deposit Insurance Corp.
The proposal implements a requirement of the Dodd-Frank financial overhaul passed in summer 2010. That law, which aimed to curtail risk-taking in the financial system, mandates such “stress tests” for the nation’s largest banks and other financial firms.
The FDIC proposal would require institutions to conduct their own tests based on three economic scenarios developed by the FDIC, using data as of Sept. 30 of any year.
