November 20, 2020

Ann E. Misback
Secretary
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue NW
Washington, DC 20551

Re: SIFMA Comment on Capital Planning and Stress Testing Requirements for Large Bank Holding Companies, Intermediate Holding Companies, and Savings and Loan Holding Companies (Docket No. R-1724, RIN 7100-AF95)

Dear Sirs and Madams:

The Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates the opportunity to comment on the notice of proposed rulemaking (the “Proposal”) issued by the Board of Governors of the Federal Reserve System (the “Board”) to conform its capital plan rule, stress capital buffer requirements, and Stress Testing Policy Statement by modifying them to be consistent with its tailoring framework.2 The Proposal also requests comment on all aspects of the Board’s guidance on capital planning for firms of all sizes.

SIFMA is encouraged by the Board’s efforts to create a more consistent and risk-sensitive capital planning and stress testing framework, and appreciates the Board’s practice of reviewing its policies and guidance to ensure that they are having their intended effect, particularly during the COVID-19 pandemic. Given the close integration of capital planning requirements and stress testing, the Proposal represents an important opportunity to review and revise both of these key elements of the framework in tandem. Effective capital planning is an essential component of sound risk management at both the firm and systemic levels, and as such, our member firms share the Board’s interest in ensuring a well-designed and transparent capital planning and stress testing framework. However, at present, certain aspects of this framework impede firms’ ability to engage in effective capital planning internally, and addressing these shortcomings should therefore be part of the Board’s current efforts to reform its capital planning requirements.