Preface
The Federal Reserve promotes a safe, sound, and efficient banking system that supports the U.S. economy through its supervision and regulation of domestic and foreign banks.
As part of its supervision efforts and as required by the Dodd-Frank Act, the Federal Reserve annually conducts a stress test.1 The stress test assesses how large banks are likely to perform under hypothetical economic conditions.2
The Federal Reserve conducts stress tests to help ensure that large banks are sufficiently capitalized and able to lend to households and businesses even in a severe recession. They evaluate the financial resilience of banks by estimating losses, revenues, expenses, and resulting capital levels under hypothetical economic conditions.
Publications related to stress testing can be found on the stress test publications page (https://www.federalreserve.gov/publications/dodd-frank-act-stress-test-publications.htm).
For information on the Federal Reserve's supervision of capital planning processes of banks, see https://www.federalreserve.gov/supervisionreg/stress-tests-capital-planning.htm.
For more information on how the Federal Reserve Board promotes the safety and soundness of the banking system, see https://www.federalreserve.gov/supervisionreg.htm.
References
1. For more information, see 12 U.S.C. § 5365(i)(1)(A). Return to text
2. U.S. bank holding companies (BHCs), covered savings and loan holding companies (SLHCs), and intermediate holding companies of foreign banking organizations (IHCs) with $100 billion or more in assets are subject to the Federal Reserve Board's supervisory stress test rules (12 CFR pt. 238, subpt. O; pt. 252, subpt. E) and capital planning requirements (12 CFR §§ 225.8; 238.170). Return to text