US banks sue Fed over ‘opaque’ stress tests

NEW YORK: A business coalition led by large US banks filed suit Tuesday against the Federal Reserve, criticizing the central bank’s annual stress test implementation as “opaque” and detrimental to economic growth.

“For years, we have highlighted serious concerns about the stress testing framework and the need for reform,” said the Bank Policy Institute, which represents US banking giants, large regional lenders and international banks operating in the United States. BPI is leading a coalition that includes the US Chamber of Commerce, the American Bankers Association and the Ohio Bankers League who are challenging the Fed’s implementation of stress tests following reforms enacted in the wake of 2008 Global Financial Crisis.