U.S. Regulators Issue Stress-Test Guidelines for Smaller Banks

The three top U.S. banking regulators are issuing guidance to banks with assets of $10 billion or more on what officials expect to see in annual stress tests mandated by new financial reform laws.

The Dodd-Frank Act, a sweeping set of financial reforms passed last July, requires banks both large and small to run their loans, securities portfolios, and funding operations through various economic scenarios, including periods of rising unemployment and economic decline. Regulators are now setting the standards for smaller banks. About 120 banks supervised by the Fed will be affected.