[Federal Reserve Plans to Reform Stress Tests, Increased Transparency Sparks Internal Debate]
The Federal Reserve has announced a comprehensive reform of the annual stress tests for large banks, aiming to disclose previously confidential models and the design process of hypothetical economic recession scenarios, while seeking public feedback. Federal Reserve Vice Chair for Supervision Bowman stated that this move will enhance transparency, but Governor Barr opposed it, arguing that excessive disclosure of details could undermine the credibility of the tests, as banks might adjust their data to meet minimum capital requirements. The Federal Reserve Board is expected to advance the proposal and finalize it next year after soliciting public comments.