Under the 2010 Dodd-Frank Act, the Federal Reserve requires midsize banks, those with consolidated assets between $10 billion and $50 billion, to conduct annual company-run stress tests.

The annual stress testing will begin this fall. Mary Frances Monroe, a senior director with Treliant Risk Advisors, believes the requirements for midsize banks will only add to their considerable compliance burden.

"The new stress testing requirements for many midsize banks will require the development of extensive data capabilities, new methodologies and robust policies, procedures and internal controls. These requirements will prove challenging for many firms adapting to a raft of new prudential and consumer regulations and transitioning to the new capital framework," writes Monroe.

Monroe also states that in time midsize banks will be expected to adopt practices equivalent to those of the larger banks.

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