The Federal Reserve Board will host a public research conference in July, with the prime focus being an examination of its stress testing framework.
“This outreach effort will help the public better understand how stress tests work and will help us learn how we can improve and refine the program,” Randal K. Quarles, vice chairman for Supervision, said. “A transparent and robust dialogue will benefit all stakeholders of the stress testing regime.”
Federal Reserve Board officials said the endeavor involves assembling academics, regulators, bankers and other stakeholders to discuss the transparency and effectiveness of the Board’s stress tests and how they can remain a dynamic and useful tool of large bank supervision.
The conference is slated to be conducted at the Federal Reserve Bank of Boston on July 9, 2019, with the Board maintaining stress tests continue to serve as a critical component of its supervision of the largest institutions by providing an independent assessment of the capital adequacy of the firms.
The Federal Reserve Board said strong capital levels act as a cushion to absorb losses. The largest firms have substantially increased capital since the first round of stress tests in 200, more than doubling capital levels to approximately $1.2 trillion.