The Federal Reserve Board is soliciting public comment regarding a proposal modification associated with the Economic Growth, Regulatory Relief, and Consumer Protection Act.
Federal Reserve officials said the revision would modify company-run stress testing requirements to conform with the Act.
Officials said the proposal is similar to separate recommendations issued by the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency. This proposal raises the threshold requiring state-member banks to conduct their company-run stress tests from $10 billion in total consolidated assets to $250 billion while also requiring firms above the threshold to conduct company-run stress tests once every other year.
The revision would eliminate the hypothetical adverse scenario from company-run stress tests for bank holding companies, per officials, in addition to state member banks, intermediate holding companies of foreign banking organizations and any nonbank financial company supervised by the Board.
The Federal Reserve Board would no longer include an adverse scenario in its supervisory stress tests and firms would still be required to test themselves against a more severe hypothetical scenario, known as the severely adverse scenario, and the supervisory stress tests also would continue to include a severely adverse scenario. Comments will be accepted until Feb. 19, 2019.