US media: Some large banks plan to sue the Federal Reserve over annual stress tests

On December 24, a person familiar with the matter revealed that several major banks are planning to sue the Federal Reserve over the annual bank stress test. The person said the lawsuit is expected to be filed this week, possibly as early as Tuesday morning local time. The Federal Reserve's stress test is an annual routine task that requires banks to maintain adequate buffer funds for non-performing loans and sets the scale of stock buybacks and dividends. After the market close on Monday this week, the Federal Reserve announced in a statement that it plans to adjust the bank stress test, but it did not provide details on the specific adjustments to the annual stress test framework. However, these adjustments may not be enough to alleviate banks' concerns about the heavy capital requirements, as the Federal Reserve stated: "The proposed adjustments are not intended to have a substantive impact on overall capital requirements." The Bank Policy Institute (BPI), which represents major banks such as JPMorgan Chase, Citigroup, and Goldman Sachs, welcomed the Federal Reserve's statement. BPI CEO Greg Baer said in a statement: "The Federal Reserve's statement today is a first step towards transparency and accountability." However, Baer also hinted at the possibility of further action: "We are carefully reviewing this statement and considering other measures to ensure timely reforms that are both legally and policy compliant."