U.S. banks sue Federal Reserve over "lack of transparency" in stress testing

NEW YORK, Dec. 24 (Xinhua) -- Trade groups representing the U.S. biggest banks sued the Federal Reserve on Tuesday, accusing it of using an opaque process to test banks' resiliency during annual stress tests.

"The Board's lack of transparency results in significant and unpredictable volatility in banks' capital requirements," the lawsuit said.

"The lawsuit comes a day after the Federal Reserve said it was overhauling the stress test regime for banks and planned to seek public comment on planned changes in early 2025," reported The Wall Street Journal about the development.

The trade groups, which include banks such as JPMorgan Chase, Bank of America and Citigroup, said a statute of limitations to change the stress-test rules expires in February, and they filed a lawsuit in Ohio to preserve their legal rights.

The groups said they can't be certain that the Fed's "recently announced reforms will provide a timely remedy to the harms arising under the current system."