Economics
Yellen Urged to Abolish Stress Tests as GOP Pursues Banks’ Wish List
- Senate’s Toomey tells Yellen that exams are hampering lending
- House’s Hensarling wants assessments to happen less frequently
Janet Yellen
Photographer: Pete Marovich/BloombergThis article is for subscribers only.
Republican lawmakers are increasingly going after a target that’s long triggered compliance headaches for Wall Street: the Federal Reserve’s annual assessments of whether banks can survive financial meltdowns.
Senator Pat Toomey urged Fed Chair Janet Yellen Thursday to abolish the stress tests, arguing they’re hampering lending, burdening banks with unnecessary costs and hurting economic growth. House Financial Services Committee Chairman Jeb Hensarling also wants the tests dialed back, and is considering proposing legislation that would subject banks to exams every other year, rather than annually.