Board of Governors of the Federal Reserve System

Welcome everyone who is joining us both in person and online to this open meeting of the Federal Reserve Board. Thank you in advance to the staff for your presentations today and thank you to everyone who worked to bring these proposals together.

The financial system remains sound and resilient. Stress testing helps us understand how to maintain that strength by making sure that large supervised institutions have sufficient capital to absorb losses and continue lending to households and businesses even during a recession.

Born out of reforms following the Global Financial Crisis, stress testing has been an important element of the Board's regulatory framework and supervisory program since 2009. Last December, we committed to improving the transparency of the stress tests and reducing the volatility of resulting capital buffer requirements. Today's meeting is a step in following through on that commitment.

The proposals would have us seek comment on the stress test models, on changes to the framework that governs the design of the hypothetical scenarios, and on the scenario for next year's stress test. I look forward to the presentations and will now turn to Vice Chair for Supervision Bowman.