Fed releases hypothetical scenarios for 2020 stress tests

This story appeared in Bank Digest.

The Federal Reserve Board has released the hypothetical scenarios for its 2020 stress test exercises, which ensure that large banks have adequate capital and processes so that they can continue lending to households and businesses, even during a severe recession. The Fed's stress test framework consists of the Comprehensive Capital Analysis and Review, also known as CCAR, and the Dodd-Frank Act stress tests. The Fed said this year's stress tests will evaluate 34 large banks with more than $100 billion in total assets.

Banks are required to submit their capital plans and the results of their own stress tests to the Fed by April 6, 2020, and the Fed said it will announce the results of its supervisory stress tests by June 30, 2020.