Capital Planning – CCAR/DFAST

Be Resilient to Unexpected Market Events

A robust Capital Planning process is key for any organization to maintain liquidity, resiliency, and preparedness for unexpected market events. For larger financial institutions, this means complying with Comprehensive Capital Analysis and Review (CCAR) / Dodd-Frank Act Stress Test (DFAST) requirements by the Federal Reserve Board (FRB), and meeting financial and resiliency objectives through maintaining adequate capital, effective corporate governance, risk management, and contingency planning. Capital planning starts with risk identification, scenario design, projections of losses, revenues and expenses, and establishing clear capital goals.

Achieve Your Capital Planning Goals

CrossCountry has built a multi-disciplinary team with deep industry and CCAR/DFAST experience to provide subject matter expertise and support our clients’ capital planning process. Our focus on revenue projections, stress loss projections, data management, process improvement, and project management will help our clients to not only meet regulatory requirements but also streamline their capital planning processes to provide business value.

The World's Most Important Number

The London Interbank Offered Rate (LIBOR) is a series of benchmark interest rates and has been called the “world’s most important number” as more than $240 trillion in products reference LIBOR.

Global regulators have expressed dissatisfaction with LIBOR for two reasons: first, the size and number of transactions that underpin LIBOR have significantly diminished and second, the rate is susceptible to manipulation.

In light of this, regulators encouraged the formation of various central bank sponsored working groups around the world to identify and create alternative reference rates to replace LIBOR. However, these new rates are not economically equivalent to LIBOR and some uncertainty exists around how existing products will change and also what new products will emerge. There is the possibility of significant customer and economic impact and uncertainty over how this will develop.

Our Services

We work with clients to perform detailed assessments of their LIBOR exposure and related processes, people and technology to determine and implement the optimal future state business and technological requirements.

Risk Identification

Facilitate risk assessment processes by identifying, assessing, and quantifying key organizational risks and revenue vulnerabilities specific to exposures and business activities

Scenario Design

Design stress scenarios to stress an organization’s vulnerabilities; translate narratives into quantitative factors that will impact an organization’s revenues, expenses, and losses

Stress Loss and Revenue Projections

Support production, analysis, validation, and documentation of applied shocks and PPNR & stress loss results

 

Accounting, Tax &
Internal Audit

Hedge accounting; Modification accounting and forecast accounting; Differences in tax treatment

IT &
Infrastructure

Enhance and adapt technology to incorporate SOFR curve; Impact planning; Transform support systems

Valuations &
Market Risk

Valuation impacts; Verification of Net Present Value (NPV) neutrality in position transition; Price testing and assurance

Compliance

Regulatory tracking / impact / relationship management; Different regulatory requirements across jurisdictions

Treasury

Transfer pricing impact; Changes to issuance programs / hedges; Asset/Liability Management (ALM) internal funding implications

Featured Insights & News

Meet Our LIBOR Transition Leadership Team

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BRUCE KLEIN

Partner Lead

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ALAN FAGAN

Director

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KEITH ST. GERMAIN

Director

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