Banks Are Getting Better at Taking Stress Tests

The stress tests now, five years in, are just a part of U.S. bank capital regulation: Capital regulation now means that you're supposed to have at least X amount of capital now (on various measures), and at least Y amount in the Fed's annual severe stress scenario. It took a while for all the banks to figure out how (the Fed thinks) the stress scenario would affect their capital, but now they have, and they make sure to have enough capital to meet the minimum.