Wednesday and Thursday, 2026-09-30 and 2026-10-01 · · run 20261002T0218Z
Fed finalizes stress test transparency changes
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The Federal Reserve Board on Wednesday finalized changes to enhance the transparency and public accountability of its stress test and reduce volatility in its stress test-related capital requirements.
The two final rules are largely similar to the proposed rules from 2025.
The first final rule requires the Board to invite public input annually on the stress test scenarios and any material model changes.
It also updates the framework that guides the design of the hypothetical scenarios and adopts the models that will be used for the 2027 stress test.
The second final rule requires the Board to average the results from the two most recent annual supervisory stress tests when calculating stress capital buffer requirements.
The Board will begin averaging stress capital buffer requirements in 2028.
Together, the changes are likely to reduce year-over-year volatility in capital requirements by approximately 50 percent and are not expected to materially affect aggregate capital requirements.
The Board also requested comment on a proposal to better capture differences in banks’ business models to generate fee income.
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