Federal Reserve Board finalizes hypothetical scenarios for its annual stress test and maintains capital requirements until public feedback is considered

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Press Release

February 04, 2026

Federal Reserve Board finalizes hypothetical scenarios for its annual stress test and votes to maintain the current stress test-related capital requirements until public feedback can be considered

For release at 4:30 p.m. EST

The Federal Reserve Board on Wednesday finalized the hypothetical scenarios for its annual stress test, which helps ensure that large banks can continue to lend to households and businesses even in a severe recession. The final scenarios are substantially similar to the scenarios proposed in October. Additionally, the Board voted to maintain the current stress capital buffer requirements until 2027, when new requirements can be calculated based on models that take public feedback into consideration.

"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 based on that feedback," said Vice Chair for Supervision Michelle W. Bowman. "This should further improve the transparency, effectiveness, and fairness of our models and improve our accountability to the public."

The Board's annual stress test evaluates the resilience of large banks by estimating losses, net revenue, and capital levels under hypothetical recession scenarios that extend two years into the future. This year, 32 banks will be tested against a severe global recession with heightened stress in both commercial and residential real estate markets, as well as in corporate debt markets. The scenarios are not forecasts and should not be interpreted as predictions of future economic conditions.

In the 2026 stress test scenario, the U.S. unemployment rate rises nearly 5.5 percentage points, to a peak of 10 percent. The unemployment rate increase is accompanied by severe market volatility, a widening of corporate bond spreads, and a collapse in asset prices, including about a 30 percent decline in house prices and a 39 percent decline in commercial real estate prices.

Large banks with substantial trading or custodial operations are also required to incorporate a counterparty default scenario component to estimate potential losses from the unexpected default of the firm's largest counterparty amid an acute market shock. In addition, banks with large trading operations will be tested against a global market shock component that primarily stresses their trading and related positions. The final scenarios include two revisions to the global market shock component to improve consistency across shocks applied to similar exposures and enhance plausibility.

The table below shows the components of the annual stress test that apply to each bank, based on data as of the third quarter of 2025. The brief methodology document describes the Board's intention to generally use the same models as the 2025 stress test with limited model adjustments.

Bank 1

Subject to global market shock

Subject to counterparty default

Ally Financial Inc.

American Express Company

Bank of America Corporation

x

x

The Bank of New York Mellon Corporation

x

Barclays US LLC

x

x

BMO Financial Corp.

Capital One Financial Corporation

The Charles Schwab Corporation

Citigroup Inc.

x

x

Citizens Financial Group, Inc.

DB USA Corporation

x

x

Fifth Third Bancorp

First Citizens Bancshares, Inc.

The Goldman Sachs Group, Inc.

x

x

HSBC North America Holdings Inc.

Huntington Bancshares Incorporated

JPMorgan Chase & Co.

x

x

KeyCorp

M&T Bank Corporation

Morgan Stanley

x

x

Northern Trust Corporation

The PNC Financial Services Group, Inc.

RBC US Group Holdings LLC

Regions Financial Corporation

Santander Holdings USA, Inc.

State Street Corporation

x

Synchrony Financial

TD Group US Holdings LLC

Truist Financial Corporation

UBS Americas Holding LLC

U.S. Bancorp

Wells Fargo & Company

x

x

1. The information listed in this table is based on third quarter 2025 data. Return to text

For media inquiries, please email media@frb.gov or call 202-452-2955.

Federal Register notice: Final Scenarios for the Board’s 2026 Supervisory Stress Test (PDF)

Board Memo (PDF)

2026 Final Supervisory Stress Test Scenarios (PDF)

2026 Scenario Review of Comments (PDF)

2026 Stress Test Methodology (PDF)

Statement by Governor Barr

Statement by Governor Cook

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Board Votes

Dodd-Frank Act Stress Tests 2026

Last Update: February 04, 2026