Fed urged to introduce annual high-rate stress tests

Results of debut scenario were reassuring, but regulators should not lower their guard

Experts broadly agree the US Federal Reserve’s inaugural stress test of interest rate risk was a success. But to get the full benefits, it shouldn’t just be a one-off exploratory scenario.

“It is hard to guess how economic conditions will change in the next six months, and how they would influence the choice of scenarios,” says Til Schuermann, a partner at Oliver Wyman who previously worked at the New York Fed developing the original post-2008 stress-testing regime. “But I do think it is