The latest comprehensive capital analysis and review (CCAR)
results are a perfect example of why there needs to be more
transparency in the Federal Reserve’s (Fed) stress
testing scenarios and models.
Its proposed stress capital buffer (SCB) is also a positive
step in terms of bringing efficiencies to the capital
framework. But more transparency needs to be added to the
process so that boards of directors can be the ones making
informed decisions about returning capital to shareholders.
Keith Noreika, partner at Simpson Thacher and the acting
comptroller of the currency for a spell in 2017, gave testimony
on July 17 before the Subcommittee on Financial Institutions
and Consumer Credit of the Committee on Financial Services of
the US House of Representatives. He focused on the tension
between the democratic need for transparency in the creation
and implementation of regulatory requirements, and the bases
for any requirements, balanced against...