The Federal Reserve today finalized the hypothetical scenarios for its annual stress test for large banks. The final scenarios are substantially similar to the scenarios proposed in October, according to the Fed.
In addition, the Fed board voted to maintain the current stress capital buffer requirements until 2027, when new requirements can be calculated based on models that take public feedback into consideration.
This year, 32 banks will be tested against a severe global recession with heightened stress in both commercial and residential real estate markets, as well as in corporate debt markets. The scenarios are not forecasts and should not be interpreted as predictions of future economic conditions, according to the Fed.
