Banking regs set 2023 stress test scenarios
By 
Aaron Nicodemus2023-02-10T18:16:00
Banking regulators unveiled new stress test requirements for the largest financial institutions, including a series of hypothetical global market shocks six banks will be required to face.
Stress tests are conducted annually by the Federal Reserve, Office of the Comptroller of the Currency (OCC), and Federal Deposit Insurance Corporation (FDIC). The regulators consult each other to develop their scenarios in accordance with the requirements of the Dodd-Frank Act.
Of 23 large banks with a global footprint being tested, 11 will be required to conduct additional tests to gauge their response to a global market shock, a counterparty default, and/or exploratory market shock, the Fed announced in its press release Thursday. The results of these tests will not contribute to the capital requirements set by this year’s stress test but instead be used by the Fed to assess a wider array of risks for use in future tests.
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