US Federal Reserve Board announces final individual capital requirements for large banks

The Federal Reserve Board has announced the final capital requirements for large banks, which will take effect from October 1. These requirements are based on the results of the Fed’s stress tests, which are designed to measure how well banks can handle severe economic downturns. In simple terms, stress tests help regulators check whether big banks have enough financial strength to survive unexpected crises.

Earlier this year, the Fed proposed a new rule to average stress test results over two years instead of relying only on one year’s results. The goal of this change is to reduce sudden swings (volatility) in capital requirements and make the system more predictable. If this rule is finalized, the capital requirements would be recalculated by combining this year’s results with last year’s (2024) results. The Fed would then publish updated requirements separately.

Fed Vice Chair for Supervision Michelle W. Bowman explained that the current requirements mark a transition phase, as the Fed works toward reducing fluctuations and increasing transparency. She added that finalizing the new averaging rule would be an important step in ensuring greater stability for banks.

The capital requirements for each bank include three key components:

• Minimum capital requirement: Fixed at 4.5% for all banks.
• Stress capital buffer (SCB): Based on stress test results, with a minimum of 2.5%.
• Capital surcharge: Applicable only for the largest and most complex banks, updated annually to reflect systemic risk.

If a bank’s capital falls below its required level, it will automatically face restrictions on dividend payouts to shareholders and on bonus payments to executives.

One exception noted is Morgan Stanley, which has requested a reconsideration to lower its stress capital buffer. The Fed is reviewing this request and will announce the final requirement for Morgan Stanley by September 30, 2025.

Large bank capital requirements, effective October 1, 2025 are as follows:

Bank	Minimum CET1 capital ratio requirement	Stress capital buffer requirement	G-SIB surcharge*	CET1 capital requirement
Ally Financial Inc.†	4.5	2.6	n/a	7.1
American Express Company	4.5	2.5	n/a	7.0
Bank of America Corporation	4.5	2.5	3.0	10.0
The Bank of New York Mellon Corporation	4.5	2.5	1.5	8.5
Barclays US LLC	4.5	4.4	n/a	8.9
BMO Financial Corp.	4.5	4.3	n/a	8.8
Capital One Financial Corporation	4.5	4.5	n/a	9.0
The Charles Schwab Corporation	4.5	2.5	n/a	7.0
Citigroup Inc.	4.5	3.6	3.5	11.6
Citizens Financial Group, Inc.†	4.5	4.5	n/a	9.0
DB USA Corporation	4.5	11.5	n/a	16.0
DWS USA Corporation	4.5	5.3	n/a	9.8
Fifth Third Bancorp†	4.5	3.2	n/a	7.7
The Goldman Sachs Group, Inc.	4.5	3.4	3.0	10.9
HSBC North American Holdings Inc.†	4.5	5.1	n/a	9.6
Huntington Bancshares Incorporated†	4.5	2.5	n/a	7.0
JPMorgan Chase & Co.	4.5	2.5	4.5	11.5
KeyCorp†	4.5	3.2	n/a	7.7
M&T Bank Corporation	4.5	2.7	n/a	7.2
Morgan Stanley	4.5	**	3.0	**
Northern Trust Corporation	4.5	2.5	n/a	7.0
The PNC Financial Services Group, Inc.	4.5	2.5	n/a	7.0
RBC US Group Holdings LLC	4.5	4.6	n/a	9.1
Regions Financial Corporation†	4.5	2.5	n/a	7.0
Santander Holdings USA, Inc.†	4.5	3.4	n/a	7.9
State Street Corporation	4.5	2.5	1.0	8.0
TD Group US Holdings LLC	4.5	2.8	n/a	7.3
Truist Financial Corporation	4.5	2.5	n/a	7.0
UBS Americas Holding LLC	4.5	5.2	n/a	9.7
U.S. Bancorp	4.5	2.6	n/a	7.1
Wells Fargo & Company	4.5	2.5	1.5	8.5