Fed to Finalize Bank Stress Test Reform in Coming Weeks, Bowman Says

Averaging two stress-test results to set the stress capital buffer is the substantive change here: it smooths year-to-year swings in capital requirements rather than letting a single adverse scenario drive the outcome. That matters for large banks whose capital planning and shareholder returns are calibrated to these buffers, and for the credibility of the tests themselves, since transparency and accountability were the stated aims. Whether the finalized rule delivers on reduced volatility without diluting the tests' severity is the open question.