Overview
- The Federal Reserve adopted two final rules that require annual public input on stress-test scenarios and material model changes and that set the models the Board will use for the 2027 stress test.
- The Fed changed the global market shock so banks with large trading books will be run against two separate market shocks and the shock that produces the larger loss will count for each firm.
- When calculating the stress capital buffer the Board will average the results of the two most recent supervisory stress tests for firms subject to both, with averaging to begin in 2028 to ensure only models that received public input are used.
- The Board asked for public comment on a proposed revision to its noninterest income model that projects fee income under stress and set a 60-day comment period after Federal Register publication.
- Officials say the package should cut year-over-year capital requirement swings by about half and not materially change aggregate capital; the Board approved the rules by a 6–1 vote with one governor dissenting.