WASHINGTON, Nov. 22 (UPI) -- The U.S. Federal Reserve said banks with assets of $50 billion or more in 2012 would be required to submit capital plans as a test against economic shock.
The plan would apply to all U.S. banks with $50 billion or more in total consolidated assets, the Fed said Tuesday in a statement.
"As a part of the review, known as Comprehensive Capital Analysis and Review or CCAR, the Federal Reserve in 2012 will carry out a supervisory stress test," the Fed said.
"Institutions will be expected to have credible plans that show they have sufficient capital so that they can continue to lend to households and businesses, even under adverse conditions," the Fed said. In addition, the central bank is pushing the banks to gear up for international standards adopted by the countries in the Basel (Switzerland) Committee on Banking Supervision.
The Fed said 31 financial firms would be subjected to the stress tests, which adds 12 banks to the list of 19 subjected to tests this year.
The firms will be asked to prove on paper they can withstand the shock of continued deterioration of the sovereign debt crisis in Europe and a downturn in the U.S. economy.
