Federal Reserve Board Vice Chair for Supervision Michael S. Barr promoted incorporating "exploratory scenarios" to address limitations in the FRB's current stress test program for the U.S. banking system.
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Former Federal Reserve Board Vice Chair for Supervision Randal Quarles argued that the regime currently used by the FRB to conduct stress tests is “illegal.”
Based on the most recent stress tests, the Federal Reserve Board concluded that large banks had enough capital to continue to lend to households and businesses, even if they were required to absorb more than $540 billion in losses.
The Federal Reserve Board published details on how it plans to conduct its "Pilot Climate Scenario Analysis" exercise and the information it hopes to gather.
Federal Reserve Board Vice Chair for Supervision Michael S. Barr outlined the elements of the board's "holistic" review of capital standards, and emphasized the importance of sufficient bank capital with respect to financial stability.