Stress tests

The Federal Reserve’s top regulator says proposed capital changes make system safer while overall capital levels are unchanged.

Overseas firms have been subject to nonpublic versions of the Federal Reserve reviews, but observers say some foreign banks may be tripped up by the public version.

Fed vice chair wants to put stress test scenarios out for comment by banks; C&Is outstanding at record level in March.

The Federal Reserve is considering allowing banks a chance to comment on stress tests before they take them and dropping any qualitative review for the largest banks’ performance, according to Randal Quarles, the central bank’s vice chairman for banking supervision.

The bank revealed Friday that it is facing hefty regulatory penalties and will likely have to restate first-quarter earnings. Declines in loan balances and fee income and questions about upcoming stress tests are only adding to investors' worries.

Over the past week, regulators have proposed the most substantial changes to capital requirements for the largest banks in years, but the most startling thing was how unremarkable they were.

Proposal would lower capital requirements for some, raise them for others; Mulvaney says enforcement division will continue to police lending discrimination.

The Federal Reserve Board released a proposal Tuesday to modernize its stress testing regime by replacing many of the existing post-stress minimum capital levels with a so-called “stress capital buffer."