Banks Should Have Say in Tougher Stress Test, Rodgin Cohen Says
- Top bank lawyer responds to Fed Governor Tarullo's comments
- Fed's stress tests have remained `black box,' Cohen says
Rodgin Cohen: Public Comment Needed on Fed Stress Tests
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The largest U.S. banks should be able to weigh in before the Federal Reserve makes capital requirements under its annual stress test even tougher, said H. Rodgin Cohen, senior chairman of New York-based law firm Sullivan & Cromwell LLP.
“If we’re going to increase these capital requirements, shouldn’t there be notice and opportunity for comment?” Cohen said in an interview Tuesday with David Westin and Stephanie Ruhle on Bloomberg Television. “The stress tests have always been in the shadows. The models the Fed uses are a black box, the estimates they use are a black box. If they’re going to increase the basic requirements, this one should be out for comment.”