Source: Bloomberg
“Banking and business groups sued the Federal Reserve over the central bank’s annual stress tests, saying they’re seeking more transparency in how the rules are adopted. The groups, including the Bank Policy Institute and American Bankers Association, contend that the Fed’s criteria for the tests are designed in secret and produce ‘vacillating and unexplained requirements and restrictions on bank capital.’ That’s affecting the cost of financial services in the US, according to a federal lawsuit filed Tuesday in Columbus, Ohio. The lawsuit asks the court to declare unlawful the models and scenarios used in the 2024 stress test, as well as those in the 2025 and 2026 versions. The groups also want the Fed to allow for public comments on the models beforehand. A Fed spokesperson declined to comment.” (12/24/24)