US banking lobby groups said on Tuesday they had filed a lawsuit against the Federal Reserve over the central bank’s stress testing framework, a major escalation between the industry and regulators.
The announcement comes a day after the Fed announced plans for “significant changes” to its annual stress tests for large US banks in an effort to make the process more transparent and the results less volatile.
“We appreciate the board’s announcement as a first step towards transparency and accountability, but believe it is necessary to file this suit to preserve our legal rights,” said Greg Baer, president and chief of the industry group the Bank Policy Institute, one of five plaintiffs in the case. It is the first lawsuit the BPI has filed against the Fed.