The Board of Governors of the Federal Reserve System ("FRB") published in the Federal Register three proposals designed to improve the transparency of its stress testing procedures. The FRB is requesting comment on each of the three proposals.
As previously covered, the first proposal would provide for enhanced disclosure of the models used by the FRB in its supervisory stress tests. The second proposal would implement a policy statement detailing the FRB methodology and framework for stress testing. The third proposal would involve modifications to its policy statement on the scenario design framework, which is intended to "enhance the counter-cyclicality and transparency" of the scenario design framework.
Comments on all the proposals must be received by January 22, 2018.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.