Figure 1. Historical and stressed tier 1 common ratio
|
Actual, Q4 2008 |
Actual, Q4 2009 |
Actual, Q4 2010 |
Actual, Q4 2011 |
Actual, Q3 2012 |
Stressed, Q4 2014 |
| Tier 1 common ratio (%) |
5.6 |
8.3 |
94. |
10.4 |
11.0 |
7.7 |
Return to Text
Figure 2. Real GDP growth rate in the severely adverse scenario, Q1 2009-Q4 2015
Q/Q seasonally adjusted growth rates annualized
Source: Bureau of Economic Analysis and Federal Reserve assumptions in the severely adverse scenario.
| OBS |
U.S. real GDP growth |
| Q1 2009 |
-5.30 |
| Q2 2009 |
-0.30 |
| Q3 2009 |
1.40 |
| Q4 2009 |
4.00 |
| Q1 2010 |
2.30 |
| Q2 2010 |
2.20 |
| Q3 2010 |
2.60 |
| Q4 2010 |
2.40 |
| Q1 2011 |
0.10 |
| Q2 2011 |
2.50 |
| Q3 2011 |
1.30 |
| Q4 2011 |
4.10 |
| Q1 2012 |
2.00 |
| Q2 2012 |
1.30 |
| Q3 2012 |
2.00 |
| Q4 2012 |
-3.50 |
| Q1 2013 |
-6.10 |
| Q2 2013 |
-4.40 |
| Q3 2013 |
-4.20 |
| Q4 2013 |
-1.20 |
| Q1 2014 |
0.00 |
| Q2 2014 |
2.20 |
| Q3 2014 |
2.60 |
| Q4 2014 |
3.80 |
| Q1 2015 |
4.2 |
| Q2 2015 |
4.1 |
| Q3 2015 |
4.6 |
| Q4 2015 |
4.6 |
Return to Text
Figure 3. Unemployment rate in the severely adverse scenario, Q1 2009-Q4 2015
Source: Bureau of Labor Statistics and Federal Reserve assumptions in the severely adverse scenario, Q1 2009-Q4 2015
| OBS |
U.S. unemployment rate |
| Q1 2009 |
8.30 |
| Q2 2009 |
9.30 |
| Q3 2009 |
9.60 |
| Q4 2009 |
9.90 |
| Q1 2010 |
9.80 |
| Q2 2010 |
9.60 |
| Q3 2010 |
9.50 |
| Q4 2010 |
9.60 |
| Q1 2011 |
9.00 |
| Q2 2011 |
9.00 |
| Q3 2011 |
9.10 |
| Q4 2011 |
8.70 |
| Q1 2012 |
8.30 |
| Q2 2012 |
8.20 |
| Q3 2012 |
8.10 |
| Q4 2012 |
8.90 |
| Q1 2013 |
10.00 |
| Q2 2013 |
10.70 |
| Q3 2013 |
11.50 |
| Q4 2013 |
11.90 |
| Q1 2014 |
12.00 |
| Q2 2014 |
12.10 |
| Q3 2014 |
12.00 |
| Q4 2014 |
11.90 |
| Q1 2015 |
11.7 |
| Q2 2015 |
11.5 |
| Q3 2015 |
11.4 |
| Q4 2015 |
11.1 |
Return to Text
Figure 4. Dow Jones Stock Market Index, end of quarter in the severely adverse scenario, Q1 2009-Q4 2015
Source: Dow Jones and Federal Reserve assumptions in the supervisory severely adverse scenario.
| OBS |
Dow Jones Total Stock Market Index |
| Q1 2009 |
8113.10 |
| Q2 2009 |
9424.90 |
| Q3 2009 |
10911.70 |
| Q4 2009 |
11497.40 |
| Q1 2010 |
12161.00 |
| Q2 2010 |
10750.00 |
| Q3 2010 |
11947.10 |
| Q4 2010 |
13290.00 |
| Q1 2011 |
14036.40 |
| Q2 2011 |
13968.10 |
| Q3 2011 |
11771.90 |
| Q4 2011 |
13109.60 |
| Q1 2012 |
14753.10 |
| Q2 2012 |
14208.60 |
| Q3 2012 |
14997.80 |
| Q4 2012 |
12,105.20 |
| Q1 2013 |
9,652.60 |
| Q2 2013 |
9,032.80 |
| Q3 2013 |
7,269.10 |
| Q4 2013 |
7,221.70 |
| Q1 2014 |
7,749.30 |
| Q2 2014 |
8,133.90 |
| Q3 2014 |
9,026.10 |
| Q4 2014 |
9,706.70 |
| Q1 2015 |
10211 |
| Q2 2015 |
12645.7 |
| Q3 2015 |
13854.4 |
| Q4 2015 |
15294.9 |
Return to Text
Figure 5. National House Price Index in the severely adverse scenario, Q1 2009-Q4 2015
Source: CoreLogic (seasonally adjusted by Federal Reserve) and Federal Reserve assumptions
| OBS |
U.S. House Price Index |
| Q1 2009 |
144.10 |
| Q2 2009 |
142.30 |
| Q3 2009 |
144.00 |
| Q4 2009 |
144.80 |
| Q1 2010 |
145.50 |
| Q2 2010 |
145.70 |
| Q3 2010 |
142.50 |
| Q4 2010 |
140.20 |
| Q1 2011 |
138.80 |
| Q2 2011 |
137.70 |
| Q3 2011 |
137.20 |
| Q4 2011 |
135.90 |
| Q1 2012 |
137.90 |
| Q2 2012 |
141.30 |
| Q3 2012 |
143.40 |
| Q4 2012 |
141.60 |
| Q1 2013 |
137.90 |
| Q2 2013 |
133.60 |
| Q3 2013 |
129.00 |
| Q4 2013 |
124.70 |
| Q1 2014 |
120.60 |
| Q2 2014 |
117.20 |
| Q3 2014 |
115.00 |
| Q4 2014 |
113.60 |
| Q1 2015 |
113.2 |
| Q2 2015 |
113.6 |
| Q3 2015 |
114.4 |
| Q4 2015 |
115.5 |
Return to Text
Figure 6. Real GDP growth in four country/country block areas in the severely adverse scenario, Q1 2009-Q4 2015
Q/Q seasonally adjusted growth rates annualized
Source: Federal Reserve calculations based on official sector sources and Federal Reserve assumptions in the severely adverse scenario. Q3 2012 data based on Federal Reserve calculations using available data as of November 13, 2012.
| OBS |
Euro area real GDP growth |
Japan real GDP growth |
U.K. real GDP growth |
Developing Asia real GDP growth |
| Q1 2009 |
-10.70 |
-15.00 |
-5.90 |
3.40 |
| Q2 2009 |
-1.10 |
6.30 |
-0.70 |
16.10 |
| Q3 2009 |
1.50 |
1.00 |
1.60 |
12.90 |
| Q4 2009 |
1.60 |
7.10 |
1.70 |
8.00 |
| Q1 2010 |
1.90 |
5.10 |
2.40 |
9.40 |
| Q2 2010 |
4.20 |
5.10 |
2.90 |
8.70 |
| Q3 2010 |
1.50 |
4.70 |
2.50 |
8.80 |
| Q4 2010 |
1.40 |
-1.10 |
-1.70 |
8.20 |
| Q1 2011 |
2.60 |
-8.00 |
2.00 |
9.60 |
| Q2 2011 |
0.90 |
-2.10 |
0.30 |
6.70 |
| Q3 2011 |
0.30 |
9.50 |
2.10 |
6.80 |
| Q4 2011 |
-1.30 |
-1.20 |
-1.40 |
6.70 |
| Q1 2012 |
0.00 |
5.20 |
-1.20 |
6.10 |
| Q2 2012 |
-0.70 |
0.30 |
-1.50 |
5.70 |
| Q3 2012 |
-0.50 |
-3.50 |
4.10 |
7.00 |
| Q4 2012 |
-8.70 |
-1.40 |
-6.50 |
0.30 |
| Q1 2013 |
-6.80 |
-4.50 |
-6.60 |
3.90 |
| Q2 2013 |
-4.30 |
-6.50 |
-3.70 |
5.90 |
| Q3 2013 |
-2.30 |
-6.80 |
-1.40 |
6.90 |
| Q4 2013 |
-0.80 |
-5.50 |
0.10 |
7.50 |
| Q1 2014 |
0.40 |
-3.10 |
0.90 |
7.90 |
| Q2 2014 |
1.20 |
-1.10 |
1.60 |
8.10 |
| Q3 2014 |
1.70 |
0.30 |
2.10 |
8.30 |
| Q4 2014 |
2.00 |
1.10 |
2.70 |
8.40 |
| Q1 2015 |
2 |
1.4 |
3.2 |
8.5 |
| Q2 2015 |
2 |
1.5 |
3.5 |
8.5 |
| Q3 2015 |
2 |
1.6 |
3.6 |
8.6 |
| Q4 2015 |
2 |
1.6 |
3.7 |
8.6 |
Return to Text
Figure 7: Projecting net income and regulatory capital
Net interest income + non-interest income - non-interest expense
= pre-provision net revenue (PPNR)
Note: PPNR includes income from mortgage servicing rights and losses from operational-risk events, mortgage put-back losses, and OREO expenses
PPNR + other revenue - provisions - AFS/HTM securities losses -
trading and counterparty losses - other losses (gains)
= pre-tax net income
Note: Change in the allowance for loan and lease losses + net charge-offs
= provisions
Pre-tax net income - taxes + extraordinary items net of taxes
= after-tax net income
After-tax net income - net distributions to common and preferred shareholders and other net reductions to shareholder's equity from DFAST assumptions
= change in equity capital
Change in equity capital - deductions from regulatory capital + other additions to regulatory capital
= change in regulatory capital
Return to Text
Figure 8. Minimum tier 1 common ratio in the severely adverse scenario
| Bank holding company |
Stressed ratios with proposed capital actions |
| Ally1 |
1.5 |
| AmEx |
11.1 |
| BofA |
6.8 |
| BNYM |
13.2 |
| BB |
9.4 |
| CapOne |
7.4 |
| Citi |
8.3 |
| Fifth Third |
8.6 |
| Goldman |
5.8 |
| JPMC |
6.3 |
| KeyCorp |
8.0 |
| Morgan Stanley |
5.7 |
| PNC |
8.7 |
| Regions |
7.5 |
| State St |
12.8 |
| SunTrust |
7.3 |
| USB |
8.3 |
| Wells |
7.0 |
| Median |
7.7 |
1. The post-stress capital ratios presented in the figure are based on an assumption that Ally remains subject to contingent liabilities associated with Residential Capital, LLC (“ResCap”). On May 14, 2012, ResCap and certain of its subsidiaries filed for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. As of March 6, 2013, the outcome of the ResCap bankruptcy remained pending.
2. The actual and post-stress capital ratios presented in the figure are based on information that BB&T provided to the Federal Reserve in regulatory reports on or before February 6, 2013. The information that BB&T provided to the Federal Reserve includes information regarding BB&T’s risk-weighted assets. On March 4, 2013, BB&T disclosed publicly that it had reevaluated its process related to calculating risk-weighted assets and determined that certain adjustments, primarily related to the presentation of certain unfunded lending commitments, were required in order to conform to regulatory guidance. These adjustments resulted in an increase to risk-weighted assets and a decrease in BB&T’s risk-based capital ratios and are not reflected in this figure.
Source: Federal Reserve estimates in severely adverse scenario.
Return to Text
Figure 9. Change from Q3 2012 to minimum tier 1 common ratio in the severely adverse scenario
| BHC |
Change from Q3 2012 to minimum |
Minimum ratio |
| Ally1 |
5.8 |
1.5 |
| AmEx |
1.6 |
11.1 |
| BofA |
4.6 |
6.8 |
| BNYM |
0.0 |
13.2 |
| BB |
0.1 |
9.4 |
| CapOne |
3.3 |
7.4 |
| Citi |
4.4 |
8.3 |
| Fifth Third |
1.1 |
8.6 |
| Goldman |
7.3 |
5.8 |
| JPMC |
4.1 |
6.3 |
| KeyCorp |
3.3 |
8.0 |
| Morgan Stanley |
8.2 |
5.7 |
| PNC |
0.7 |
8.7 |
| Regions |
2.9 |
7.5 |
| State St |
4.9 |
12.8 |
| SunTrust |
2.5 |
7.3 |
| USB |
0.7 |
8.3 |
| Wells |
2.9 |
7.0 |
| Median |
3.1 |
7.7 |
1. The post-stress capital ratios presented in the figure are based on an assumption that Ally remains subject to contingent liabilities associated with Residential Capital, LLC (“ResCap”). On May 14, 2012, ResCap and certain of its subsidiaries filed for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. As of March 6, 2013, the outcome of the ResCap bankruptcy remained pending.
2. The actual and post-stress capital ratios presented in the figure are based on information that BB&T provided to the Federal Reserve in regulatory reports on or before February 6, 2013. The information that BB&T provided to the Federal Reserve includes information regarding BB&T’s risk-weighted assets. On March 4, 2013, BB&T disclosed publicly that it had reevaluated its process related to calculating risk-weighted assets and determined that certain adjustments, primarily related to the presentation of certain unfunded lending commitments, were required in order to conform to regulatory guidance. These adjustments resulted in an increase to risk-weighted assets and a decrease in BB&T’s risk-based capital ratios and are not reflected in this figure.
Source: Federal Reserve estimates in severely adverse scenario.
Return to Text
Figure 10. Projected losses in the severely adverse scenario
Billions of dollars
| BHC |
Supervisory Estimate |
| First-lien mortgages, domestic |
$60.1 |
| Trading and counterparty losses |
$97.0 |
| Credit cards |
$87.1 |
| Commercial and industrial loans |
$60.5 |
| Securities losses (AFS/HTM) |
$12.9 |
| Junior liens and HELOCs, domestic |
$37.2 |
| Commercial real estate, domestic |
$32.9 |
| Other consumer loans |
$26.8 |
| Other loans |
$11.9 |
| Other losses |
$36.0 |
| Sum |
$462.4 |
Return to Text
Figure 11. Total loan loss rates in the severely adverse scenario
| BHC |
Supervisory Estimate |
Median |
|
|
|
| Ally |
5.2 |
6.6 |
| AmEx |
11.2 |
6.6 |
| BofA |
6.9 |
6.6 |
| BNYM |
2.7 |
6.6 |
| BB |
5.5 |
6.6 |
| CapOne |
13.2 |
6.6 |
| Citi |
9.2 |
6.6 |
| Fifth Third |
6.3 |
6.6 |
| Goldman |
5.2 |
6.6 |
| JPMC |
7.7 |
6.6 |
| KeyCorp |
7.3 |
6.6 |
| Morgan Stanley |
3.1 |
6.6 |
| PNC |
5.8 |
6.6 |
| Regions |
7.6 |
6.6 |
| State St |
2.0 |
6.6 |
| SunTrust |
6.4 |
6.6 |
| USB |
7.1 |
6.6 |
| Wells |
7.1 |
6.6 |
| Median |
6.6 |
|
Return to Text
Figure 12. First-lien mortgages, domestic loss rates in the severely adverse scenario
| BHC |
Supervisory Estimate |
Median |
| Ally |
6.0 |
6.0 |
| AmEx |
0.0 |
6.0 |
| BofA |
5.9 |
6.0 |
| BNYM |
6.7 |
6.0 |
| BB |
2.8 |
6.0 |
| CapOne |
3.8 |
6.0 |
| Citi |
9.4 |
6.0 |
| Fifth Third |
5.4 |
6.0 |
| Goldman |
7.7 |
6.0 |
| JPMC |
8.8 |
6.0 |
| KeyCorp |
10.3 |
6.0 |
| Morgan Stanley |
0.6 |
6.0 |
| PNC |
6.1 |
6.0 |
| Regions |
8.2 |
6.0 |
| State St |
0.0 |
6.0 |
| SunTrust |
6.5 |
6.0 |
| USB |
2.8 |
6.0 |
| Wells |
7.1 |
6.0 |
| Median |
6.0 |
|
Return to Text
Figure 13. Junior liens and HELOCs, domestic loss rates in the severely adverse scenario
| BHC |
Supervisory Estimate |
Median |
|
|
|
| Ally |
9.3 |
9.4 |
| AmEx |
0.0 |
9.4 |
| BofA |
10.0 |
9.4 |
| BNYM |
12.8 |
9.4 |
| BB |
6.1 |
9.4 |
| CapOne |
21.1 |
9.4 |
| Citi |
13.4 |
9.4 |
| Fifth Third |
10.4 |
9.4 |
| Goldman |
9.8 |
9.4 |
| JPMC |
8.8 |
9.4 |
| KeyCorp |
12.6 |
9.4 |
| Morgan Stanley |
9.5 |
9.4 |
| PNC |
6.3 |
9.4 |
| Regions |
8.5 |
9.4 |
| State St |
0.0 |
9.4 |
| SunTrust |
11.4 |
9.4 |
| USB |
6.1 |
9.4 |
| Wells |
9.3 |
9.4 |
|
|
|
| Median |
9.4 |
|
Return to Text
Figure 14. Commercial and industrial loss rates in the severely adverse scenario
| BHC |
Supervisory Estimate |
Median |
|
|
|
| Ally |
5.2 |
6.5 |
| AmEx |
9.4 |
6.5 |
| BofA |
5.1 |
6.5 |
| BNYM |
3.5 |
6.5 |
| BB |
7.2 |
6.5 |
| CapOne |
8.9 |
6.5 |
| Citi |
6.0 |
6.5 |
| Fifth Third |
6.3 |
6.5 |
| Goldman |
49.8 |
6.5 |
| JPMC |
8.5 |
6.5 |
| KeyCorp |
5.8 |
6.5 |
| Morgan Stanley |
7.8 |
6.5 |
| PNC |
6.4 |
6.5 |
| Regions |
6.7 |
6.5 |
| State St |
0.0 |
6.5 |
| SunTrust |
6.2 |
6.5 |
| USB |
9.5 |
6.5 |
| Wells |
6.6 |
6.5 |
|
|
|
Return to Text
Figure 15. Commercial real estate, domestic loss rates in the severely adverse scenario
| BHC |
Supervisory Estimate |
Median |
|
|
|
| Ally |
6.5 |
7.8 |
| AmEx |
0.0 |
7.8 |
| BofA |
8.6 |
7.8 |
| BNYM |
7.7 |
7.8 |
| BB |
7.1 |
7.8 |
| CapOne |
4.8 |
7.8 |
| Citi |
11.3 |
7.8 |
| Fifth Third |
7.7 |
7.8 |
| Goldman |
8.2 |
7.8 |
| JPMC |
7.3 |
7.8 |
| KeyCorp |
7.2 |
7.8 |
| Morgan Stanley |
10.2 |
7.8 |
| PNC |
7.3 |
7.8 |
| Regions |
9.7 |
7.8 |
| State St |
18.3 |
7.8 |
| SunTrust |
9.7 |
7.8 |
| USB |
8.0 |
7.8 |
| Wells |
8.6 |
7.8 |
| Median |
7.8 |
|
Return to Text
Figure 16. Credit card loss rates in the severely adverse scenario
| BHC |
Supervisory Estimate |
Median |
| Ally |
0.0 |
15.8 |
| AmEx |
12.0 |
15.8 |
| BofA |
16.2 |
15.8 |
| BNYM |
0.0 |
15.8 |
| BB |
16.6 |
15.8 |
| CapOne |
22.2 |
15.8 |
| Citi |
17.9 |
15.8 |
| Fifth Third |
21.6 |
15.8 |
| Goldman |
0.0 |
15.8 |
| JPMC |
14.4 |
15.8 |
| KeyCorp |
19.1 |
15.8 |
| Morgan Stanley |
0.0 |
15.8 |
| PNC |
15.5 |
15.8 |
| Regions |
18.0 |
15.8 |
| State St |
0.0 |
15.8 |
| SunTrust |
15.0 |
15.8 |
| USB |
17.3 |
15.8 |
| Wells |
17.7 |
15.8 |
| Median |
15.8 |
|
Return to Text
Figure 17. Other consumer loss rates in the severely adverse scenario
| BHC |
Supervisory Estimate |
Median |
|
|
|
| Ally |
4.9 |
4.1 |
| AmEx |
0.0 |
4.1 |
| BofA |
4.3 |
4.1 |
| BNYM |
0.5 |
4.1 |
| BB |
7.0 |
4.1 |
| CapOne |
11.8 |
4.1 |
| Citi |
16.5 |
4.1 |
| Fifth Third |
3.6 |
4.1 |
| Goldman |
2.8 |
4.1 |
| JPMC |
3.9 |
4.1 |
| KeyCorp |
8.8 |
4.1 |
| Morgan Stanley |
1.4 |
4.1 |
| PNC |
3.5 |
4.1 |
| Regions |
6.8 |
4.1 |
| State St |
0.0 |
4.1 |
| SunTrust |
2.6 |
4.1 |
| USB |
5.4 |
4.1 |
| Wells |
5.9 |
4.1 |
| Median |
4.1 |
|
Return to Text
Figure 18. Other loan loss rates in the severely adverse scenario
| BHC |
Supervisory Estimate |
Median |
|
|
|
| Ally |
1.8 |
1.8 |
| AmEx |
4.5 |
1.8 |
| BofA |
1.3 |
1.8 |
| BNYM |
1.7 |
1.8 |
| BB |
3.0 |
1.8 |
| CapOne |
1.8 |
1.8 |
| Citi |
1.8 |
1.8 |
| Fifth Third |
2.4 |
1.8 |
| Goldman |
1.6 |
1.8 |
| JPMC |
1.9 |
1.8 |
| KeyCorp |
2.8 |
1.8 |
| Morgan Stanley |
0.8 |
1.8 |
| PNC |
1.6 |
1.8 |
| Regions |
2.2 |
1.8 |
| State St |
1.5 |
1.8 |
| SunTrust |
2.2 |
1.8 |
| USB |
3.8 |
1.8 |
| Wells |
1.6 |
1.8 |
| Median |
1.8 |
|
Return to Text
Figure 19. PPNR rates in the severely adverse scenario
| BHC |
Supervisory Estimate |
Median |
|
|
|
| Ally |
-2.8 |
2.7 |
| AmEx |
11.0 |
2.7 |
| BofA |
1.3 |
2.7 |
| BNYM |
2.1 |
2.7 |
| BB |
4.1 |
2.7 |
| CapOne |
6.7 |
2.7 |
| Citi |
2.5 |
2.7 |
| Fifth Third |
4.2 |
2.7 |
| Goldman |
1.7 |
2.7 |
| JPMC |
2.0 |
2.7 |
| KeyCorp |
3.0 |
2.7 |
| Morgan Stanley |
0.2 |
2.7 |
| PNC |
3.2 |
2.7 |
| Regions |
2.6 |
2.7 |
| State St |
1.5 |
2.7 |
| SunTrust |
2.8 |
2.7 |
| USB |
6.2 |
2.7 |
| Wells |
3.3 |
2.7 |
|
|
|
| Median |
2.7 |
|
Return to Text
Figure 20. Pre-tax net income rates in the severely adverse scenario
| BHC |
Supervisory Estimate |
Median |
|
|
|
| Ally |
-7.1 |
-1.7 |
| AmEx |
0.6 |
-1.7 |
| BofA |
-2.7 |
-1.7 |
| BNYM |
1.6 |
-1.7 |
| BB |
0.3 |
-1.7 |
| CapOne |
-2.9 |
-1.7 |
| Citi |
-1.6 |
-1.7 |
| Fifth Third |
-0.2 |
-1.7 |
| Goldman |
-2.4 |
-1.7 |
| JPMC |
-1.4 |
-1.7 |
| KeyCorp |
-2.8 |
-1.7 |
| Morgan Stanley |
-2.9 |
-1.7 |
| PNC |
-0.5 |
-1.7 |
| Regions |
-1.9 |
-1.7 |
| State St |
0.8 |
-1.7 |
| SunTrust |
-2.5 |
-1.7 |
| USB |
1.1 |
-1.7 |
| Wells |
-1.9 |
-1.7 |
| Median |
-1.7 |
|
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Figure A. Ending aggregate tier 1 common levels using different tax rates
Data plotted as a bar chart with sloped arrows between bars indicating percent growth in projected aggregate tier 1 common capital at the end of the planning horizon under the severely adverse scenario when the supervisory tax rate is changed by 15 percentage points in either direction.
The first bar represents a 15 percentage point decrease over the current supervisory tax rate, the middle bar represents the current supervisory tax rate, and the third bar represents a 15 percentage point increase over the supervisory tax rate. As indicated by the downward sloping arrow between the middle bar and the first bar, when the supervisory tax rate is decreased by 15 percentage points, the projected ending aggregate tier 1 common levels decline 2 percent in the severely adverse scenario. As indicated by the upward sloping arrow between the middle bar and the third bar, when the supervisory tax rate is increased by 15 percentage points, the projected ending aggregate tier 1 common levels rise 2 percent in the severely adverse scenario.
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Figure B. Change in minimum tier 1 common ratio when tax rate is adjusted by 15 pps
| Change in minimum tier 1 common ratio when tax rate is increased by 15 pps (# of BHCs) |
|
| Increase tax rate by 15 pps |
Number of BHCs |
| Decline >25 bps |
0 |
| Decline 10-25 bps |
2 |
| Decline 0-10 bps |
8 |
| Increase 0-10 bps |
5 |
| Increase >10 bps |
3 |
| Change in minimum tier 1 common ratio when tax rate is reduced by 15 pps (# of BHCs) |
|
| Decrease tax rate by 15 pps |
Number of BHCs |
| Decline >25 bps |
0 |
| Decline 10-25 bps |
4 |
| Decline 0-10 bps |
11 |
| Increase 0-10 bps |
2 |
| Increase >10 bps |
1 |
| Source: Federal Reserve projections in the severely adverse scenario. |
|
| "Bps" is basis points; "pps" is percentage points. |
|
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Last update: March 28, 2013