Exclude internal stress tests from CCAR, says US auditor

US Government Accountability Office says internal tests weaken incentives for banks to create 'meaningful and severe stress tests'

GAO report also recommends greater transparency into the Fed's CCAR process

A federal oversight body has recommended the US Federal Reserve exclude bank-run stress tests from assessments of capital adequacy under its Comprehensive Capital Analysis and Review (CCAR) programme.

The Government Accountability Office (GAO) – a Congressional agency charged with holding public bodies to account – recommends in a report that the Fed exclude stress-test results from a bank's proprietary stress scenarios under its CCAR assessment, to "help provide stronger incentives for

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