US Federal Reserve finalises changes to enhance the transparency and public accountability of its stress test and reduce volatility in its stress test-related capital requirements

Requires the Board to invite public input annually on the stress test scenarios and any material model changes. Requires the Board to average the results from the two most recent annual supervisory stress tests for firms subject to the stress test in both years. The changes are likely to reduce Y/Y volatility in capital requirements by approximately 50% and are not expected to materially affect aggregate capital requirements. Fed's Bowman: "The stress test is an essential component of our regulatory capital framework." "Today's changes preserve its resilience by ensuring that it is transparent, granular, and risk-sensitive. The public will now have greater assurance that the risks banks take will be reflected appropriately in their stress test losses and their capital requirements."