Fed seeks to smooth capital changes in bank stress tests

The U.S. Federal Reserve will revise its stress tests of major U.S. banks to smooth out changes in required capital levels from year to year, according to a proposal outlined by the central bank on Monday.

Results from the annual health check, which seeks to measure how lenders would fare in a hypothetical recession, would be averaged over two years, and the central bank would solicit public comments on the hypothetical scenarios each year before finalizing them. The Fed said in its announcement.