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Fed developing extra 'stress test' scenarios to test for bank weaknesses: official

2023-10-20 01:58
WASHINGTON The U.S. Federal Reserve is developing additional scenarios to probe for weaknesses in large banks as part
Fed developing extra 'stress test' scenarios to test for bank weaknesses: official

WASHINGTON The U.S. Federal Reserve is developing additional scenarios to probe for weaknesses in large banks as part of its 2024 stress test, its top regulatory official said Thursday.

Fed Vice Chair for Supervision Michael Barr said the additional scenarios, which would examine various types of hypothetical economic and market stress, would be "exploratory" and not help set a firm's capital requirements. But more varied stresses could help identify underlying weaknesses and improve how regulators supervise large firms, he added.

(Reporting by Pete Schroeder; Editing by Chizu Nomiyama)