US Federal Reserve to Modernize Bank Stress-Testing for Evolving Market Risks

Seeking to strengthen oversight of large financial institutions, the Federal Reserve announced a forthcoming overhaul of its annual stress-testing framework. The updated process will incorporate new macroeconomic variables, scenario flexibility, and advanced modeling for liquidity and trading risks. Officials said the initiative responds to calls for greater realism in capital assessments following recent market turbulence. Analysts view the shift as a step toward aligning supervisory practices with global standards, ensuring the US banking sector remains resilient under varied economic shocks.