While most people scanned Friday's Board of Governors release on the Supervisory Capital Assessment Program, or SCAP, for clues to the stress tests, few noted the elements of a standardized approach in the making.

In particular, the last two pages of the release illustrate standardized schedules for reporting loan concentrations and loss rates that could make the procedure operational beyond the 19 biggest institutions. However, it would be premature to take the idea further without refinement. In my view three main areas exist where slight changes could make the procedure a meaningful and lasting part of regulatory reporting.

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