Major banks are planning to file a lawsuit against the U.S. Federal Reserve regarding the annual stress tests conducted by the regulator. This action reflects the banks' determination to persuade the central bank to ease capital requirements deemed excessive. The news follows the Fed's announcement of potential changes to the stress tests, which assess a bank's resilience during severe economic downturns. The proposed changes include allowing banks to provide input on the hypothetical scenarios used in the tests and potentially averaging results over two years to reduce volatility. However, the Fed emphasizes that these modifications will not significantly impact overall capital requirements.
Dec 24 - Major banks are planning to sue the U.S. Federal Reserve over the annual stress tests conducted by the regulator, CNBC reported on Tuesday, citing a source familiar with the matter.This highlights the extent to which banks are prepared to go to persuade the central bank to scale back capital requirements the industry deems too harsh.
These tests determine the capital banks must set aside to meet their obligations and also dictate the scope of dividend payouts and stock buybacks.
Banks Federal Reserve Stress Tests Capital Requirements Lawsuit
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