The US Federal Reserve has proposed a major revision to its annual stress testing framework for large banks, suggesting that capital requirements be based on an average of stress test results over two years rather than a single year. This change aims to reduce volatility in capital requirements resulting from yearly fluctuations in stress test outcomes. The proposal also includes a three-month delay in the effective date of the new capital requirements. The Fed has opened the plan for public comment as part of its effort to overhaul the stress testing process. Some experts, including Barr, have raised concerns that increased transparency in the testing methodology might enable banks to manipulate capital requirements. The initiative reflects the Fed's ongoing efforts to refine regulatory measures for large financial institutions.