Annual stress test scenarios for 2026 finalized, capital rules unchanged
The Federal Reserve Board has finalized the hypothetical scenarios for its 2026 annual supervisory stress test, effective February 15, 2026. The Board also voted to maintain current stress test-related capital requirements pending public feedback.
Annual resilience check for large banks
The Federal Reserve Board has finalized the hypothetical scenarios for its 2026 annual supervisory stress test, which become effective on February 15, 2026. These annual stress tests are designed to ensure that large banks maintain their ability to lend to households and businesses even during severe economic recessions.
The tests evaluate the financial resilience of these institutions by estimating potential losses, revenues, expenses, and the resulting capital levels, which serve as a crucial buffer against adverse economic shocks.
The Board utilizes the outcomes of these stress tests, in part, to determine and set the capital requirements for large banks, thereby contributing to overall financial stability.
From proposal to final scenarios
To enhance the transparency of the annual stress tests and actively seek public feedback, the Board had previously invited comments on the proposed stress test scenarios for the 2026 cycle on October 24, 2025. Following this consultation period, the Board is now announcing the issuance of these finalized scenarios.
The complete set of final scenarios, along with supporting models, data, and the Board's comprehensive review of and responses to the public comments received, are all accessible on the Federal Reserve's official website, providing full disclosure on the process and outcomes.
Steady hand on bank capital
The finalization of stress test scenarios is a routine, yet critical, step in maintaining banking sector resilience.
While the process itself is standard, the decision to hold capital requirements steady underscores a cautious approach amidst evolving economic conditions.
This ensures stability without preempting potential adjustments based on forthcoming public input, reflecting a balanced regulatory stance.