The new buffer represents a reduction from the current 5.5%, which will remain in effect through the end of Q3.

In April, the Fed proposed a rule change to calculate the buffer using a two-year average of stress test results. The new 4.5% requirement was determined under the current framework and doesn't incorporate the proposed changes.

The lower buffer frees up capital that Capital One can potentially use for shareholder returns or business investment, signaling greater confidence in its ability to weather economic stress.

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