The Federal Reserve Board ("FRB") (i) finalized
enhanced disclosure of the models used in the agency's
supervisory stress tests, (ii) altered its policy regarding the
scenario design framework and (iii) adopted a policy statement on
prior disclosures. The changes are intended to increase the
transparency of the stress testing program for the nation's
largest and most complex banks.
The FRB finalized enhanced disclosure of the models
used in the agency's supervisory stress tests conducted under
Regulation YY. The final enhanced disclosures consist of three
components: (i) "enhanced descriptions of supervisory models,
including key variables," (ii) "modeled loss rates on
loans" grouped by critical risk characteristics and summary
statistics related to loans in each group, and (iii) portfolios of
hypothetical loans and the estimated loss rates linked with the
loans in each specific portfolio. The FRB stated that it will
provide further information on a number of other
