According to TechFlow news on December 24, CNBC reported that a knowledgeable source revealed that several large banks are planning to sue the Federal Reserve regarding the annual bank stress tests. The source stated that a lawsuit is expected to be filed this week, possibly as early as local time Tuesday morning. The Federal Reserve's stress tests are an annual routine that requires banks to hold sufficient buffer funds for bad loans and stipulates the scale of stock buybacks and dividends.
This Monday after the market close, the Federal Reserve announced in a statement that it plans to adjust bank stress tests, but it did not specify the specific adjustments to the annual stress test framework. However, these adjustments may not be enough to alleviate banks' concerns about heavy capital requirements. The Federal Reserve stated, "These proposed adjustments are not intended to have a significant impact on overall capital requirements."
Greg Bell, CEO of the Bank Policy Institute (BPI), which represents large banks such as JPMorgan Chase, Citigroup, and Goldman Sachs, welcomed the Federal Reserve's statement. He stated in a statement, "Today's statement from the Federal Reserve is a first step toward transparency and accountability." However, Bell also hinted that further actions may be taken: "We are carefully reviewing this statement and considering taking additional measures to ensure timely reforms that are both legally compliant and policy aligned."