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Fed's Bowman: Future 'Stress Capital Buffer' to Use Average of Last Two Stress Tests
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Federal Reserve Governor Michelle Bowman announced that the Federal Reserve will change its methodology for determining a bank's 'stress capital buffer' (SCB). In the future, the central bank will use the average of a bank's two most recent stress test results, rather than relying on a single test outcome. This adjustment aims to smooth out volatility in capital requirements that can arise from year-to-year fluctuations in stress test results. The statement was made by Governor Bowman and reported by financial news source Jin10. The change is expected to provide more predictable capital planning for large banks, though the specific implementation timeline was not detailed in the announcement.
Source report
Federal Reserve Governor Michelle Bowman announced that the central bank will use the average of a bank's two most recent stress test results when determining its "stress capital buffer" in the future.
Source
金十数据Neutral / independent
Part of this Story
Fed Governor Bowman announces stress test reforms to finalize in coming weeks