April 12, 2012 - Stress tests faced by banks in the US could be altered in the near future as the Federal Reserve seeks to improve this process. That is if comments made by Daniel Tarullo, a board member of the Fed, are anything to go by, as he has revealed the body is currently exploring ways in which this method of monitoring the performance of financiers could be enhanced.
During a speech delivered at the Federal Reserve Bank of Chicago, Mr Tarullo - a former government official who took office in January 2009 - indicated that a "one-size-fits-all" approach to these tests is no longer appropriate.
The official went on to say that smaller banks should not be subject to the same assessments as larger financiers and insisted the Fed is now looking to improve its lines of communication with firms.
In addition, stress tests are also likely to start earlier from now on, which will enable the body to "require resubmissions of capital plans in a more timely way".