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2026-09-18 23:34:09
[Federal Reserve Vice Chair for Supervision Bowman: Final Revisions to Stress Tests Expected in Coming Weeks] Wall Street lenders are one step closer to applying more lenient capital requirements to the Federal Reserve's stress tests, with large banks expected to benefit further as U.S. regulators continue to ease capital rules. Speaking in prepared remarks for an event in London on Friday, Federal Reserve Vice Chair for Supervision Michelle Bowman said that final revisions to the Fed's stress tests would likely address concerns about risk sensitivity and what risks the tests cover. "These revisions will increase transparency and public accountability, enhance the reliability and accuracy of the models, and reduce volatility in capital requirements resulting from annual stress test results," Bowman said. She also indicated that the Fed expects to consider final revisions to the stress test framework "in the coming weeks." The Fed's revisions are likely to incorporate much of what was previously proposed, but Bowman said she would consider feedback from the banking industry on the stress test proposal before voting on the final rules. Specifically, she cited a request from the banking industry to "set a specific date to lock in corporate balance sheets before the proposed scenarios are published," addressing concerns about risk sensitivity. Another requirement is to incorporate two global market shock scenarios based on the same date to improve risk coverage. Bowman also anticipates that by the end of the year, a related set of capital rules will be finalized, including a plan to reduce the additional capital requirements for the largest U.S. banks, as well as adjustments to risk-based capital requirements for large and small banks.
