Fed moves toward greater transparency in bank stress testing

The Federal Reserve is preparing to make its bank stress-testing process significantly more transparent, according to Reuters.
The Fed plans to publish more of the models, equations and scenarios used to evaluate banks, giving institutions greater visibility into a process that has historically provided limited detail about its underlying methodology.
Greater transparency could improve banks' ability to anticipate capital requirements, although the final impact will depend on how much of the testing framework is disclosed and how future scenarios are constructed.