Fed Unveils Stress Test Criteria as Agency Overhauls Exams (1)

The Federal Reserve finalized hypothetical scenarios for its stress test, which gauge how Wall Street lenders would fare under a potential recession.

The central bank said Wednesday the final scenarios are substantially similar to the criteria proposed in October. The Fed’s Board of Governors voted to maintain the current stress capital buffer requirements until 2027 as it continues the process of overhauling the annual exam.

Jerome Powell, chairman of the US Federal Reserve, left, speaks with Michelle Bowman, vice chair for supervision at the US Federal Reserve

Photographer: Al Drago/Bloomberg

“Waiting to calculate new stress capital buffer requirements until we receive public feedback will give us the opportunity to correct any deficiencies in our supervisory models based on that feedback,” Vice Chair for Supervision ...