Federal Reserve Board requests comment on proposals to enhance the transparency and public accountability of its annual stress test

Consistent with its prior statement, the Federal Reserve Board on Friday requested comment on proposals to enhance the transparency and public accountability of its annual stress test. The proposals seek comment on: the stress test models; changes to the framework that guides the design of the hypothetical scenarios; and the hypothetical scenarios for the upcoming 2026 stress test. The Federal Reserve conducts stress tests to ensure that large banks are sufficiently capitalized and able to lend to households and businesses even in a severe recession. In December 2024, the Board announced it would modify the test in important respects to improve its resilience. "In an effort to avoid litigation, the Board committed to make significant improvements in the transparency of the stress tests.