CITIGROUP INC

On September 30, 2026, the FRB issued two final rules intended to (1) enhance the transparency and public accountability of its stress testing framework, and (2) to reduce volatility in SCB requirements. In connection with these two final rules, the FRB also finalized the models for the 2027 stress test and issued a notice of proposed rulemaking requesting public input on a revised non-interest income model.

The first final rule requires the FRB to solicit annual public input on supervisory stress test scenarios and material model changes, enhances the information disclosed to participating firms and establishes additional guidelines for scenario design. This final rule also revises certain elements of the annual stress testing calendar. For firms subject to the global market shock component, including Citi, the FRB will apply two global market shock scenarios using the same as-of date and use the scenario that generates the higher losses for each firm in calculating its supervisory stress test results.

The second final rule intends to reduce SCB year-over-year volatility by generally calculating the stress capital decline component using the average of the maximum projected decline in a firm’s CET1 capital ratio under the two most recent annual supervisory stress tests. The dividend add-on component will not be averaged and will continue to be updated annually. Under the final rule, the SCB remains subject to the existing 2.5% floor. The rule also changes the annual effective date of the SCB requirement from October 1 to January 1 and eliminates the existing phase-in for highly material supervisory model changes. The change in the annual effective date and other applicable elements of the final rule will first apply to SCB requirements effective January 1, 2028, while the averaging methodology will first apply to SCB requirements effective January 1, 2029.