Major US Banks Plan to Sue the Federal Reserve

According to a recent report by CNBC, some of the largest banks in the United States are preparing to sue the Federal Reserve over its annual bank stress tests. A source familiar with the matter revealed that these legal actions are expected to be filed later this week.

In response to these anticipated lawsuits, the Federal Reserve has issued a statement seeking public comment on significant changes aimed at improving the transparency of its bank stress tests and reducing the volatility of resulting capital buffer requirements. However, the proposed changes may not sufficiently address the banks' concerns about onerous capital requirements, as they are not expected to materially affect overall capital requirements.

Groups such as the Bank Policy Institute (BPI) and the American Bankers Association have previously expressed concerns about the stress tests, describing the process as "opaque" and asserting that it negatively impacts bank lending and economic growth.