Fed to publish stress test results June 23

WASHINGTON — The Federal Reserve announced Monday that it will release the results of its supervisory stress tests on June 23.

The stress tests are among the most important supervisory innovations to emerge from the 2008 financial crisis. The tests involve banks with more than $100 billion of assets running their balance sheets through a series of hypothetical macroeconomic stress scenarios. Banks that retain their minimum capital levels through each of the scenarios are deemed compliant, while those who do not may face further supervisory scrutiny from the Federal Reserve.

The stress tests initially gave many banks compliance headaches, but in more recent years banks have become more accustomed to the process and none have fallen below the minimum capital threshold since 2014. The Fed also initiated significant changes to the stress testing regime with the passage of the 2018 Dodd-Frank reform bill, including raising the threshold for banks subject to stress testing from $50 billion of assets to $100 billion of assets. The stress tests are also performed biannually rather than annually for all banks except those labeled global systemically important banks, or G-SIBs.

This year's results will include examinations of 34 banks.