Joint Trades Letter to the Federal Reserve re: Proposed Changes to Supervisory Stress Test Models and Scenarios

Ladies and Gentlemen:

The Bank Policy Institute, the American Bankers Association, the Financial Services Forum, the Securities Industry and Financial Markets Association, the International Swaps and Derivatives Association, Inc., and the U.S. Chamber of Commerce (the "Associations") submit this letter in response to the Board of Governors of the Federal Reserve System’s Notice of Proposed Rulemaking regarding Enhanced Transparency and Public Accountability of the Supervisory Stress Test Models and Scenarios; Modifications to the Capital Planning and Stress Capital Buffer Requirement Rule, Enhanced Prudential Standards Rule, and Regulation LL including the data and model documentation associated with the proposal posted on the Federal Reserve's website. The Associations submitted a separate comment letter on the proposed scenarios for the Federal Reserve’s 2026 supervisory stress test on December 1, 2025 (the "Proposed 2026 Scenarios" and "2026 Scenarios Letter").

I. Executive Summary 

As noted in the 2026 Scenarios Letter, we welcome the Federal Reserve's efforts to provide additional transparency and opportunities for public feedback on its supervisory stress testing process, which is critical for the Federal Reserve to comply with its obligations under the Administrative Procedure Act ("APA"). Both the APA and the Due Process Clause require the Federal Reserve to disclose to the public and request comment on the models and scenarios used in its supervisory stress test. As described in the 2026 Scenarios Letter, the stress test models and scenarios are used to impose binding capital requirements and have the force and effect of law. The annual stress tests also implement express statutory delegations. These foundational legal principles underpin our recommendations in this letter regarding enhancements to the stress testing framework to increase transparency and public involvement in the stress testing process.

In particular, we highlight several key points made in Section II of this letter.

Download the joint comment letter to read the full text.