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# Federal Reserve signals final bank stress-test revisions within coming weeks
- URL: https://www.theglobalbanker.com/federal-reserve-signalled-final-bank-stress-test-revisions-within-coming-weeks/
- Published: 2026-09-18T15:47:32.000Z
- Updated: 2026-10-02T01:30:36.000Z
- Description: Federal Reserve Vice Chair for Supervision Michelle Bowman said final stress-test revisions would reach the Board within weeks, including measures she said could halve capital-buffer volatility for large banks.
- Author: TGB Editorial Team
- Tags: Regulations, Americas

Federal Reserve Vice Chair for Supervision Michelle Bowman said the Board would consider final revisions to its bank stress-testing framework in the coming weeks. The package would increase disclosure of models and scenarios and average the two most recent tests when setting a bank’s stress capital buffer. Bowman said those changes together could cut buffer volatility by half without materially changing aggregate required capital. The revisions have not yet been approved.

The remarks followed earlier Federal Reserve proposals intended to make the annual exercise more transparent and less variable. Stress-test results feed into capital requirements for large banks through the stress capital buffer. Bowman said the effective date for that buffer would move from 1 October to 1 January. The change would give banks more time between receiving results and implementing the resulting capital requirement.

#### CHANGES TO THE CAPITAL FRAMEWORK

Bowman also said she expected the Federal Reserve to complete broader risk-based capital reforms and changes to the surcharge for global systemically important banks before year-end. Bowman said that, taken together, the reforms would create a durable framework for capital requirements that are rational, robust, aligned with risk and transparent.

The stress-test changes would alter both the information available to banks and the calculation used to translate test results into capital requirements. Averaging two test cycles is intended to reduce sharp annual movements caused by scenario design. Model disclosures will publish the equations, variables, coefficients, underlying assumptions, limitations and decision-making rationale for each model.

#### SUPERVISORY TESTING REMAINS SEPARATE

Bowman distinguished the annual capital exercise from future supervisory stress tests. Under the approach she described, supervisory-test results would not change capital requirements and would not be published. She previewed that approach; it has not been formally proposed.

The next milestone is formal Board consideration of the final stress-test revisions. Bowman said she would also recommend a third proposal seeking comment on a revised noninterest income model for the 2027 stress test. Separate capital and G-SIB surcharge measures will require their own final action before the year-end objective can be met.