OCC releases scenarios for bank stress tests

The Office of the Comptroller of the Currency has released the 2026 Dodd‑Frank Act company‑run stress test scenarios for large national banks and federal thrifts, consisting of a baseline and a severely adverse scenario that align with those used by the Fed and FDIC.

What was released and who it applies to

• The OCC’s 2026 package provides the supervisory baseline and severely adversemacroeconomic and financial market paths that covered institutions must use in their DFAST company‑run stress tests.

• Covered institutions are national banks and federal savings associations with total consolidated assets of more than 250 billion dollars, consistent with the post‑EGRRCPA threshold for Dodd‑Frank stress testing.

Structure of the scenarios

• The supervisory scenarios incorporate 28 variables, including real and nominal GDP growth, unemployment, CPI inflation, short‑ and long‑term interest rates, equity prices, commercial and residential real estate prices, and key foreign variables.

• The baseline scenario tracks the consensus of private‑sector forecasts, while the severely adverse scenario is a hypothetical severe global recession with sharp increases in unemployment, large declines in asset prices, and stressed credit spreads; it is explicitly not a forecast.

Trading, counterparty, and operational risk features

• Institutions with material trading or custodial operations must also incorporate a global market shock and a counterparty default component into the severely adverse scenario, capturing instantaneous losses on trading and derivatives exposures.

• The OCC’s DFAST‑14A instructions specify separate schedules for trading, counterparty credit risk, operational risk, and pre‑provision net revenue, and require banks to submit both supervisory (OCC) and bank‑defined baseline and stress scenarios.​

Coordination with Fed and FDIC

• The OCC coordinated with the Federal Reserve and FDIC so that all three agencies are using consistent macroeconomic paths and risk factors for the 2026 Dodd‑Frank stress testing cycle.

• The Federal Reserve’s final 2026 severely adverse scenario reflects its updated scenario design framework and will drive the supervisory stress capital buffer, while the OCC uses the same underlying macro path for the company‑run tests of OCC‑supervised institutions.

Practical implications for large banks

• Large OCC‑supervised institutions now have the definitive 2026 variables and paths to parameterize credit loss, PPNR, and capital projections, and to populate the DFAST‑14A schedules.

• Given the renewed emphasis on transparency in the Fed’s scenario design and the OCC’s recent revisions to stress‑test information collections, firms should expect closer benchmarking of model outputs to scenario‑consistent loss ranges and more scrutiny of outliers, especially in trading, CRE, and unsecured consumer portfolios.