By Patrick Rucker
WASHINGTON (Reuters) - A independent study of the financial costs and benefits of Wall Street 'stress tests' could be released as soon as Tuesday and may strengthen calls to reform U.S. banking rules, said sources familiar with the report.
The Federal Reserve conducts a review each year of how the largest U.S. banks could fare during a financial crisis and the Government Accountability Office has been studying that work for two years.
The report will suggest about 15 ways that the Federal Reserve would be able to improve the openness of its yearly review and reduce some of the regulatory burden, sources familiar with the report said.
Although the GAO findings are non-binding, they could exert some influence on an impending debate about whether some financial regulations are unduly costly to the financial sector.
President-elect Donald Trump has said that he wants to ease federal regulations.
Rep. Jeb Hensarling, the chairman of the House Financial Services Committee, asked for the study in September 2014 and has urged the Fed to cooperate.
In May, Hensarling wrote to Fed Chair Janet Yellen, saying the central bank's annual reviews "lack transparency" and the stress tests might be too driven by global banking standards.
"I remain troubled that the Fed may have added items to the Stress Test that were conceived, negotiated and approved in closed-door international meetings," Hensarling wrote on May 26.
The annual stress tests are part of the Dodd Frank financial reform legislation of 2010.
The Fed sets hypothetical scenarios of financial upheaval and then assesses how the largest banks might respond.
Critics have said those evaluations are too subjective while defenders argue that the drill forces banks to be better prepared for real life events.
(This story corrects to fix typo in word 'financial' in fourth paragraph.)
(Reporting by Patrick Rucker; Editing by Bernadette Baum)