The Federal Reserve Board has requested public comment on a set of proposals aimed at increasing the transparency and accountability of its annual stress tests for large banks. The announcement, made Friday, follows the Board’s previous commitment to modify the testing process in order to enhance resilience and public understanding.
The proposed changes focus on several key areas: greater transparency around the models used in stress tests, adjustments to the framework that shapes hypothetical economic scenarios, and specific details about the scenarios planned for the 2026 test cycle. The Federal Reserve conducts these stress tests to ensure that major banks remain well-capitalized and able to support lending during periods of economic downturn.
In December 2024, the Board stated it would revise aspects of the test as part of an ongoing effort to strengthen financial stability. These latest proposals are part of that initiative.
“In an effort to avoid litigation, the Board committed to make significant improvements in the transparency of the stress tests. These proposals take a necessary step toward fulfilling that commitment, and would promote due process,” said Vice Chair for Supervision Michelle W. Bowman. “Regulated firms should be subject to clearly articulated and transparent rules. Capital requirements should not be set in a way that is shielded from meaningful public scrutiny. As vice chair for supervision, I am committed to providing transparency and accountability for both the Board and our supervised firms. This is essential for maintaining the value of our stress testing program, and for supervision and regulation more broadly.”
Additional elements under consideration include improving disclosure processes in future test cycles, modifying timelines so there is time for public comment on proposed scenarios each year, and refining reporting forms to reduce administrative burden while improving risk measurement.
According to the Federal Reserve Board, while outcomes from annual stress tests have varied considerably over time—largely due to differences in scenario design—the new proposals are not expected to significantly change overall capital requirements across various banks or scenarios.
The deadline for submitting comments on the 2026 test scenarios is December 1, 2025. Comments regarding increased model and scenario transparency are due by January 22, 2026.
Further information can be found through official releases including:
– The Board memo
– The Federal Register notice on enhanced transparency
– The Federal Register notice requesting comment on 2026 scenarios
– The proposed supervisory stress test scenarios for 2026
Statements from Federal Reserve leadership—including Chair Powell, Vice Chair Bowman, Governor Barr, Governor Miran, and Governor Waller—are also available following an open Board meeting held October 24, 2025.
