Fed’s Tarullo: stress testing needs to evolve
Tougher tests being drawn up for systemic banks
The Federal Reserve's stress testing is due an upgrade, governor Daniel Tarullo said on September 26, as he outlined plans for improvements to the framework.
In the five years since the first US stress test, capital requirements have been updated, the Fed has gained experience in how the tests work and attention has begun to turn to more complex elements, such as modelling second-round effects that could deepen a crisis.
As a first step, the Fed unveiled proposals on September 26 that would
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