Fed extends consultation period for stress test improvement plan to provide banks with more time for feedback.

Golden Finance reported that the Fed agreed to give large banks more time to submit comments on certain aspects of a proposal aimed at improving stress testing models for large financial institutions. The Fed stated in a release on Friday that the deadline for public comments on the proposal to improve the transparency and accountability of stress testing models and scenarios will be extended by one month to February 21. The Fed also noted that the deadline for comments on the proposed 2026 stress testing scenario remains December 1. Annual stress tests were introduced after the 2008 financial crisis to enhance the banking sector's ability to cope with future economic shocks, assessing banks' performance under hypothetical recession scenarios. Banks have long advocated for modifications to the tests, claiming that the testing is overly burdensome.