The first is the stress testing required by the Dodd-Frank Act, which we have shortened to the acronym DFAST – the Dodd-Frank Act stress tests. The purpose of DFAST is to quantitatively assess how bank capital levels would fare in stressful economic and financial scenarios.
The second program, called the Comprehensive Capital Analysis and Review, or CCAR, combines the quantitative results from the stress tests with more-qualitative assessments of the capital planning processes used by banks. For example, under CCAR, supervisors evaluate the ability of banks to model losses for various categories of loans and securities and to estimate earnings and capital requirements in alternative scenarios.