Trade groups representing the country’s biggest banks sued the Federal Reserve on Tuesday, accusing it of using an opaque process to test banks’ resiliency during annual stress tests.“The Board’s lack of transparency results in significant and unpredictable volatility in banks’ capital requirements,

The U.S.'s largest banks filed a lawsuit Tuesday against the Federal Reserve over the annual stress test that requires lenders to uphold sufficient reserves for potential loans losses while also controlling the scale of share buybacks and dividend payouts,

The Federal Reserve will seek comment on the current stress-testing regime with an eye toward increasing transparency and reducing volatility. Modifications would not go into effect until at least 2026.