Banks, Fed Seek to Pause Stress Test Lawsuit During Revamp (1)

The Federal Reserve and banking trade groups agreed to pause litigation over the stress testing process for big banks while the agency works on proposals that would allow more industry input over the annual checkups.

The US District Court for the Southern District of Ohio should put the litigation on hold until Aug. 1 while the Fed develops new rules, including a proposal to seek public comment on the scenarios the central bank uses to test banks’ capital and liquidity levels, the parties said in a May 23 filing.

“Given the progress that has been made to date and ...