A group of big banks and business groups are suing the Federal Reserve over the annual bank stress tests, claiming the current process falls short of its goals. The Bank Policy Institute, which represents major banks like JPMorgan, Citigroup, and Goldman Sachs, is leading the lawsuit.
The groups say they don’t oppose stress testing but argue that the current system produces unclear requirements and restrictions on bank capital. The Federal Reserve has announced plans to make changes to the tests, including seeking public comment, in response to concerns from lawmakers and industry groups.
While some see the changes as a positive step towards transparency, others may view them as insufficient to address long-standing issues with the stress test process. The lawsuit aims to resolve “longstanding legal violations” by requiring the Fed to subject the stress test process to public input as mandated by federal law.
Source: https://www.cnbc.com/2024/12/24/biggest-banks-planning-to-sue-the-federal-reserve-over-annual-stress-tests.html