The US central bank will show its math for bank stress tests

The US central bank will make public the models it uses to test how well banks can handle financial crises. This means banks and the public will see exactly how the central bank decides if a bank is strong enough.

For years, the models used to stress test banks were mostly secret. Banks had to guess what the central bank was looking for, and the public had to trust the process. Now, everyone will see the actual calculations and assumptions. This could lead to more public debate about how banks are regulated.