The U.S. Federal Reserve said it will keep large bank capital buffers unchanged during the 2026 stress testing cycle as it reviews planned changes to its annual supervisory framework. The central bank confirmed that it will defer any revisions to banks’ stress capital buffers until 2027, giving regulators time to gather and assess public feedback on the models and scenarios used in the tests. The Fed opened these models to outside review after an October 2025 vote, aiming to improve clarity around how it measures banks’ ability to absorb losses during a severe downturn. Fed Vice Chair for Supervision Michelle Bowman stated, “Waiting to calculate new stress capital buffer requirements until we receive public feedback will give us the opportunity to correct any deficiencies in our supervisory models.”
The Fed released its 2026 stress test scenarios alongside the announcement, projecting sharp rises in unemployment, large swings in markets, and steep declines in asset values. 2025’s results showed that major banks held capital well above required minimums and could continue lending even in a deep recession. Many banks have argued that past exams lacked transparency, so the move to make models public marks a shift in supervision. Not all officials agreed, however. Governor Michael Barr warned that freezing capital levels could weaken the link between current risk and required buffers, but the Fed chose to proceed with a pause as it refines the testing system.
