Capital Planning at Large Bank Holding Companies Practice Question set covers the following learning objectives:
Describe the Federal Reserve’s Capital Plan Rule and explain the seven principles of an effective capital adequacy process for bank holding companies (BHCs) subject to the Capital Plan Rule.
Describe practices that can result in a strong and effective capital adequacy process for a BHC in the following areas:
Risk identification;
Internal controls, including model review and validation;
Corporate governance;
Capital policy, including setting of goals and targets and contingency planning;
Stress testing and stress scenario design;
Estimating losses, revenues, and expenses, including quantitative and qualitative methodologies;
Assessing the impact of capital adequacy, including risk-weighted asset (RWA) and balance sheet projections.