We relied on these principles in establishing the new regulatory framework in the wake of the global financial crisis. The essential elements of that framework—which now includes dynamic and risk-sensitive capital requirements and rules-based, quantitative liquidity standards—all reflect extensive and significant consultations with the public and careful analysis of the impact that these rules will have on individual banks and the U.S. banking system.
Our benchmark for capital adequacy is now based on standardized measures of risk and leverage across all banks. This is supplemented by an annual stress test with extensive transparency and disclosure around the process and results that provides additional, consistent risk sensitivity.