Read carefully the reasons for the “object” verdict on those institutions which obtained “objections” to their capital plans. Explain the reasons and describe at least two alternatives that the firms should consider in order to resubmit a plan that can be approved by the Federal Reserve with no objections.
MATERIAL:
The Board of Governors objected to Santander’s CCAR 2015 capital plan on qualitative grounds because of widespread and critical deficiencies across the BHC’s capital planning processes. Specific deficiencies were identified in a number of key areas, including governance, internal controls and risk identification and risk management, management information systems (MIS), and assumptions and analysis that support the BHC’s capital planning processes. The Board of Governors also objected on qualitative grounds to the capital plan of Deutsche Bank Trust Corporation. Deutsche Bank Trust Corporation’s capital planning and stress testing practices were assessed based on the standards applied to the largest, most systemic banking organizations in the United States, because of the size, scope, and complexity of Deutsche Bank’s U.S. operations. In its evaluation, the Federal Reserve identified numerous and significant deficiencies across Deutsche Bank Trust Corporation’s risk-identification, measurement, and aggregation processes; approaches to loss and revenue projection; and internal controls.