The Federal Reserve said on Tuesday it will release the results of its annual supervisory stress tests for large banks on June 24 at 4 p.m. ET. The yearly exercise is designed to evaluate how major banking organizations would respond to a hypothetical economic downturn and associated market pressures.
This year's assessment covered 32 large banks and applied a severe global recession scenario. According to the Fed, the scenario incorporated heightened stress across commercial and residential real estate markets and in corporate debt markets.
The central bank emphasized that the published results will not change capital requirements for large banks. Instead, the Fed noted that a bank's performance in the annual exercise determines the size of the "stress capital buffer" it must hold against potential losses.
Changes to the exercise and transparency
In October, the Fed announced revisions to the annual stress testing framework intended to increase transparency. Those changes include a plan by the Fed to disclose models that have been treated as confidential in the past and to provide explanations of how it constructs the hypothetical economic downturns used in the exercise.
Context from the prior cycle
In the 2025 stress test cycle, the Fed concluded that 22 of the largest U.S. banks were well-positioned to withstand a hypothetical severe economic contraction and to continue lending. The Fed reported that those firms retained strong capital buffers even after reflecting hundreds of billions of dollars in projected losses under the test’s hypothetical conditions.
Implications
The upcoming publication will provide market participants and regulators with the Fed’s latest assessments of capital resilience under a defined severe scenario, and will include the results for each of the 32 banks examined. The Fed’s stated move toward greater disclosure is intended to make the stress testing methodology more understandable by revealing previously confidential models and the way hypothetical downturns are constructed.