§ 252.42 - Definitions

§ 252.42 Definitions.

Cross Reference

Link to an amendment published at 84 FR 59106, Nov. 1, 2019.

For purposes of this subpart FE, the following definitions apply:

(a)

Advanced approaches means the risk-weighted assets calculation methodologies at 12 CFR part 217, subpart E, as applicable, and any successor regulation.

(b) Adverse scenario means a set of conditions that affect the U.S. economy or the financial condition of a covered company that are more adverse than those associated with the baseline scenario and may include trading or other additional components.

(c) Average total consolidated assets means the average of the total consolidated assets as reported by a bank holding company on its Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) for the four most recent consecutive quarters. If the bank holding company has not filed the FR Y-9C for each of the four most recent consecutive quarters, average total consolidated assets means the average of the company's total consolidated assets, as reported on the company's FR Y-9C, for the most recent quarter or consecutive quarters. Average total consolidated assets are measured on the as-of date of the most recent FR Y-9C used in the calculation of the average.

(d) Bank holding company has the same meaning as in § 225.2(c) of the Board's Regulation Y (12 CFR 225.2(c)).

(e)

Baseline scenario means a set of conditions that affect the U.S. economy or the financial condition of a covered company and that reflect the consensus views of the economic and financial outlook.

(f)

Covered company means:

(1) A U.S. bank holding company

(other than a foreign banking organization)

with average total consolidated assets of

$50

$100 billion or more;

(2) A U.S. intermediate holding company subject to this section pursuant to § 252.153

of this part

; and

(3) A nonbank financial company supervised by the Board.

(g) Depository institution has the same meaning as in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)).

(h)

Foreign banking organization has the same meaning as in

§ 211.21(o) of the Board's Regulation K (

12 CFR 211.21(o)

).

(i) Nonbank financial company supervised by the Board means a nonbank financial company that the Financial Stability Oversight Council has determined under section 113 of the Dodd-Frank Act (12 U.S.C. 5323) shall be supervised by the Board and for which such determination is still in effect.

(j)

.

Pre-provision net revenue means the sum of net interest income and non-interest income less expenses before adjusting for loss provisions.

Planning horizon means the period of at least nine consecutive quarters, beginning on the first day of a stress test cycle over which the relevant projections extend.

(k) Pre-provision net revenue means the sum of net interest income and non-interest income less expenses before adjusting for loss provisions.

(l)

Provision for credit losses means:

(1)

Until December 31, 2019: (i)

With respect to a covered company that has

not

adopted the current expected credit losses methodology under

U.S. generally accepted accounting principles (

GAAP

)

, the provision for

loan and lease losses as reported on the FR Y-9C (and as would be reported on the FR Y-9C in the current stress test cycle); and (ii) With respect to a covered company that has adopted the current expected

credit losses

methodology under GAAP

,

the provision for loan and lease losses,

as would be

calculated and

reported

on the FR Y-9C

by

a covered company that has not adopted

the

current expected credit losses methodology under GAAP; and

(2) Beginning January 1, 2020:

(i) With respect to a

covered company

that has adopted the current expected credit losses methodology under GAAP, the provision for credit losses, as would be reported by the covered company

on the FR Y-9C in the current stress test cycle; and,

(

ii

2) With respect to a covered company that has not adopted the current expected credit losses methodology under GAAP, the provision for loan and lease losses as would be reported by the covered company on the FR Y-9C in the current stress test cycle.

(m)

Regulatory capital ratio means a capital ratio for which the Board has established minimum requirements for the company by regulation or order, including

the company's tier 1 and supplementary leverage ratios as calculated under 12 CFR part 217

,

including the deductions required under 12 CFR 248.12,

as applicable,

and

the company's

common equity tier 1, tier 1, and total risk-based

regulatory capital ratios

as

calculated under 12 CFR part 217

, including

and the deductions required under 12 CFR 248.12

and the transition provisions at 12 CFR 217.1(f)(4) and 217.300

; except that the company shall not use the advanced approaches to calculate its regulatory capital ratios.

(n)

Scenarios are those sets of conditions that affect the U.S. economy or the financial condition of a covered company that the Board

annually

determines are appropriate for use in the supervisory stress tests, including, but not limited to, baseline

, adverse,

and severely adverse scenarios.

(o)

Severely adverse scenario means a set of conditions that affect the U.S. economy or the financial condition of a covered company and that overall are significantly more severe than those associated with the

adverse

baseline scenario and may include trading or other additional components.

(p)

Stress test cycle means the period beginning on January 1 of a calendar year and ending on December 31 of that year.

(q)

Subsidiary has the same meaning as in

§ 225.2(o) the Board's Regulation Y (

12 CFR 225.2

)

.

[Reg. YY, 79 FR 64049, Oct. 27, 2014, as amended at 80 FR 75425, Dec. 2, 2015; 82 FR 9329, Feb. 3, 2017; 84 FR 4245, Feb. 1484 FR 59106, Nov. 1, 2019]