Explainer-What are the Fed's bank 'stress tests' and what's new this year?
Key takeaways
- Explainer-What are the Fed's bank 'stress tests' and what's new this year?
- Federal Reserve is due to release the results of its annual bank health checks on Wednesday at 4:00 p.m.
- Under the "stress test" exercise, the Fed tests big banks balance sheets against a hypothetical scenario of a severe economic downturn, the elements of which change annually.
Explainer-What are the Fed's bank 'stress tests' and what's new this year? FILE PHOTO: The Federal Reserve headquarters in Washington September 16 2015. REUTERS/Kevin Lamarque/File Photo · Reuters By Pete Schroeder Tue, June 23, 2026 at 5:06 PM GMT+7 4 min read By Pete Schroeder
WASHINGTON, June 23 (Reuters) - The U.S. Federal Reserve is due to release the results of its annual bank health checks on Wednesday at 4:00 p.m. ET (2000 GMT).
Under the "stress test" exercise, the Fed tests big banks balance sheets against a hypothetical scenario of a severe economic downturn, the elements of which change annually. Usually, the results are a big deal because they dictate how much capital those banks need to set aside to be healthy, and how much they can return to shareholders via share buybacks and dividends.