(Reuters) – Big banks plan to sue the U.S. Federal Reserve over the regulator’s annual stress tests, CNBC reported on Tuesday, citing people familiar with the matter.
The report says the lawsuit is scheduled for this week and could happen as early as Tuesday.
This highlights the extent to which banks are prepared to persuade central banks to scale back capital requirements that the industry deems too stringent.
The report was released just one day after the Fed announced it was considering major changes to stress tests that measure banks’ ability to weather losses during severe economic downturns.
These tests determine what capital banks must set aside to meet their obligations, and also determine the extent of dividend payments and share buybacks.
The Fed could allow banks to provide input on what-if scenarios they use for these annual health exams, as well as average results over two years to reduce annual variation in results. said.
However, the regulator said that “the proposed changes are not intended to have a material impact on overall capital requirements.”
JPMorgan Chase declined to comment. Goldman Sachs and Citigroup did not respond to Reuters requests for comment.
(Reporting by Niket Nishant in Bengaluru; Editing by Pooja Desai)
