The Federal Reserve’s stress test scenarios are crucial for ensuring banks can handle economic unpredictability. By 2025, these evaluations will test banks against severe hypothetical economic conditions, including recessions and market disruptions, while integrating innovative technologies like AI for precise outcomes. Emphasizing dynamic and transparent stress testing, the focus will be on identifying risks, capital planning, and incorporating contemporary challenges such as climate-related risks. These tests are integral to fostering resilience, strategic decision-making, and maintaining trust in the financial system.
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