Federal Reserve Board Seeks Comment on Proposals to Enhance Transparency and Public Accountability of Annual Stress Test

The Federal Reserve Board has requested comment on proposals to enhance the transparency and public accountability of its annual stress test, with the aim of promoting due process and reducing litigation risks. The proposals cover several key areas, including stress test models, hypothetical scenarios, and disclosure processes. The Board seeks to improve the transparency of its stress tests, which are conducted to ensure that large banks are sufficiently capitalized to withstand severe economic downturns. Vice Chair for Supervision Michelle W. Bowman emphasized the importance of transparency and accountability in maintaining the value of the stress testing program.

Key Takeaways:

• The Federal Reserve Board has requested comment on proposals to enhance the transparency and public accountability of its annual stress test.
• The proposals cover several key areas, including stress test models, hypothetical scenarios, and disclosure processes.
• The Board seeks to improve the transparency of its stress tests, which are conducted to ensure that large banks are sufficiently capitalized to withstand severe economic downturns.
• The proposals aim to promote due process and reduce litigation risks.
• The Board estimates that the proposed stress test model and scenario changes would not materially change capital requirements for firms subject to the supervisory stress test, across various stress scenarios and starting test conditions.
• Comments on the 2026 scenarios are due by December 1, 2025, while comments on the proposal enhancing model and scenario transparency are due by January 22, 2026.
• Vice Chair for Supervision Michelle W. Bowman emphasized the importance of transparency and accountability in maintaining the value of the stress testing program.
• The Board's annual stress test outcomes vary from year to year, resulting in volatility in capital requirements based on scenario design.

Statistics:

• Comments on the 2026 scenarios are due by December 1, 2025.
• Comments on the proposal enhancing model and scenario transparency are due by January 22, 2026.
• The proposed stress test model and scenario changes would not materially change capital requirements for firms subject to the supervisory stress test, across various stress scenarios and starting test conditions.
• The Board estimates that the proposed stress test model and scenario changes would result in a negligible change in capital requirements, averaging around 0.1% change in capital requirements for firms subject to the supervisory stress test.

Sources:

• ENPublishing: "Federal Reserve Board requests comment on proposals to enhance the transparency and public accountability of its annual stress test" (October 27, 2025)
• Federal Reserve Board: Proposals to Enhance Transparency and Public Accountability of Annual Stress Test (2025)