Moving towards CCAR compliance and understanding the implications for DFAST institutions

Moving towards CCAR compliance and understanding the implications for DFAST institutions

City Scape Businessman Leader Thinking Concept

Robert Chan, SVP, Head of Quantitative Analytics, City National Bank shares his insight with us ahead of the Stress Testing USA: CCAR & DFAST Congress.

 Robert, can you please tell the Risk Insights readers a little bit about yourself, your experiences and what your current professional focus is?

I am the Head of Stress Testing at City National Bank. My background previously has been in investment and corporate banking, as well as corporate strategy and finance. I have spent the last four years in stress testing, first
as the head of stress testing for CNB’s DFAST process, and then as the head of stress testing for CNB’s CCAR, Large Bank DFAST and Enterprise Wide Stress Testing processes.

 At the Stress Testing USA: CCAR & DFAST Congress, you will be speaking on your insight regarding – Moving towards CCAR compliance and understanding the implications for DFAST institutions. Why do you believe this is a key talking point in the industry right now?

I think that it’s a key talking point because banks who have not undergone the process will absolutely underestimate the time, effort and resources necessarytocomply. Itisascrucialasevertounderstandwhatittakesto create the infrastructure for a large bank.

 In your experience, how can financial institutions best manage additional costs and resource constraints that CCAR poses?

Know ahead of time what to expect. Hire and talk to professionals who have undergone the process. Consultants can help in the process, especially in the beginning and for large one-time implementation projects.

 Can you provide an outline of infrastructure and data requirements and how these could differ if the threshold is passed?

I would tell those interested to learn about the FR Y-14A, M and Q schedules and be aware of the conversion to Large Bank DFAST and what that entails. Infrastructure in terms of personal involved is exponential when compared to Mid-Size Bank DFAST. Data requirements are enormous.

 Can you give a brief overview of the heightened expectations for CCAR filers and how to prepare for these?

I would encourage professionals to read and understand regulatory guidance and public disclosures of other banks to be aware of the heightened expectations.

What, in your opinion does the future hold for stress testing professionals, and how can they keep up with the increasing changes in the industry?

The future of stress testing professionals is bright. To keep up with the increasing changes, attend conferences such as Stress Testing USA.

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