At the same time that we were building our stress testing program, we were also making changes to capital rules to address weaknesses observed during the crisis. These included new minimum capital requirements and a capital buffer on top of these requirements. The buffer puts increasingly strict and automatic limits on capital distributions as a bank’s capital declines toward the minimum.
Large banks are also subject to a potential countercyclical capital buffer (CCyB), which I will discuss more shortly. And the largest banks are subject to an additional buffer of capital based on a measure of their systemic risk. Stress testing and stronger capital requirements have combined to greatly strengthen the resiliency of the U.S. banking system.