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FDIC announces final stress test rule

The FDIC announced publication on Tuesday of its final rule regarding Dodd-Frank required company-run stress testing.

The rule, which applies to covered institutions with total consolidated assets greater than $10 billion that are regulated by a primary federal financial regulatory agency, requires an annual company-run stress test.

Institutions with greater than $50 billion are required by the final rule to begin conducting annual stress tests this year, but the FDIC reserves the authority to delay implementation on a case-by-case basis as warranted. Data as of September 30 will be used to conduct the stress tests, with results due in January.

Implementation for covered institutions with total consolidated assets between $10 billion and $50 billion is delayed until October 2013 by the rule.

Additionally, the FDIC board approved a final rule refining the deposit insurance assessment system for insured depository institutions with more than $10 billion assets. Definitions used to identify concentrations in higher-risk assets are amended by the bill to better reflect the risk posed to institutions and the FDIC.

The loss, income and reserve ratio projections for the Deposit Insurance Fund for the next several years were also updated by the FDIC, which concluded that the DIF reserve ratio is on track to reach the statutory minimum target of 1.35 percent by the September 30, 2020, deadline.

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