Search Results for keywords:"stress testing"

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Search Results: keywords:"stress testing"

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  • 2024-28538 — Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of Proposed Rule Change by The Options Clearing Corporation Concerning Enhancements to the System for Theoretical Analysis and Numerical Simulations (“STANS”) and OCC's Comprehensive Stress Testing (“CST”) Methodology, To Better Capture the Risks Associated With Short-Dated Options
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    Type:Notice
    Citation:89 FR 97131
    Reading Time:about 38 minutes

    The Securities and Exchange Commission is reviewing a proposed rule change by the Options Clearing Corporation (OCC) to enhance its methods for assessing the risks of short-dated options. The OCC plans to adjust how it aligns day-count conventions between option price smoothing and implied volatility scenarios and extend the term structure to better account for options with less than one month to expiration. These changes aim to improve the accuracy of margin and stress testing components, ensuring that the financial risks are well-managed. The rule also outlines the potential impacts on margin requirements and clearing funds, with slight increases expected for accounts with a high concentration of short-dated options.

    Simple Explanation

    The Options Clearing Corporation plans to improve how they check the risks for some special types of options that expire really soon, like in less than a month, to make sure everything stays safe and fair. This might mean small changes in how much money people have to keep aside to handle these options if things don’t go as planned.

  • 2021-02182 — Capital Planning and Stress Testing Requirements for Large Bank Holding Companies, Intermediate Holding Companies and Savings and Loan Holding Companies
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    Type:Rule
    Citation:86 FR 7927
    Reading Time:about 2 hours

    The Federal Reserve Board has established new rules to adjust the capital and stress testing requirements for large bank holding companies and intermediate holding companies. These rules are tailored to the risk levels of different companies, with specific standards set for firms falling under "Category IV" based on the Board's revised prudential framework. This update aligns with previous rule changes and includes modifications to capital planning, stress tests, and regulatory reporting requirements. The final rule also requires certain savings and loan holding companies to adhere to similar capital planning and stress testing standards.

    Simple Explanation

    The Federal Reserve made some new rules for big banks to make sure they have enough money saved up for difficult times. They want these banks to plan better for the future and check how much money they need, with special rules for different types of banks based on how risky they are.

  • 2020-28204 — Enterprise Liquidity Requirements
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    Type:Proposed Rule
    Citation:86 FR 1306
    Reading Time:about 107 minutes

    The Federal Housing Finance Agency (FHFA) has proposed a new rule introducing liquidity and funding requirements for Fannie Mae and Freddie Mac, addressing weaknesses revealed during the 2008 financial crisis. These requirements aim to ensure the companies have enough liquid assets to cover short-term and long-term financial needs, reducing the risk that they will require taxpayer bailouts. The rule also includes reporting obligations for the companies, mandating that their liquidity positions and management strategies be shared with FHFA and the public. The proposal invites public comments and suggests adjustments to liquidity requirements during economic stress.

    Simple Explanation

    The FHFA wants Fannie Mae and Freddie Mac to have plans so they always have enough money to pay their bills, even when things get tough, so they don’t need to borrow from others.