Board of Governors of the Federal Reserve System

The Federal Reserve Board on Tuesday invited public comment on a proposal that would modify company-run stress testing requirements to conform with the Economic Growth, Regulatory Relief, and Consumer Protection Act.

The proposal would raise the threshold requiring state-member banks to conduct their company-run stress tests from $10 billion in total consolidated assets to $250 billion. Additionally, in place of the current annual cycle, the proposal would generally require firms above the threshold to conduct company-run stress tests once every other year.

The proposal also would eliminate the hypothetical "adverse" scenario from company-run stress tests for bank holding companies, state member banks, U.S. intermediate holding companies of foreign banking organizations, and any nonbank financial company supervised by the Board. Similarly, the Board would no longer include an "adverse" scenario in its supervisory stress tests. The firms would still be required to test themselves against a more severe hypothetical scenario, known as the "severely adverse" scenario, and the supervisory stress tests also would continue to include a "severely adverse" scenario.

The proposal is similar to separate proposals issued by the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency. Comments will be accepted until February 19, 2019.

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