Stress Tests Give Banks More Say on Criteria in New Fed Plan (1)

Wall Street lenders would get an early peek into criteria for upcoming stress tests under a new plan being considered by the Federal Reserve to overhaul its marquee exam.

The central bank’s plan aims to improve the design for certain models including credit losses, operational risk and securities, according to documents released Friday. Other changes would include taking feedback in advance from the industry on the “severely adverse scenario” that the Fed intends to use for the next stress test.

The release included criteria for the 2026 version of the test, with the most severe scenario asking banks to gauge ...