Large banks just passed the Fed's annual stress test — and the rules around insider lending are about to change.

Large banks just passed the Fed's annual stress test — and the rules around insider lending are about to change.

Here's what landed. The Federal Reserve confirmed all large banks are well-capitalized and recession-ready. They can keep lending to households and businesses through a severe downturn. That's the clean headline. No failures. No asterisks.

Second item. The Fed is requesting public comment on a proposal to modernize Regulation O — the rule governing credit extended to bank insiders. Executives, board members, major shareholders. Anyone sitting close enough to a lending decision to tip it their way. Nothing finalized. But the fact that this is moving means the Fed thinks the current framework has gaps.

Two moves in one day. One gives the sector a green light. The other puts a microscope on who's borrowing from their own bank. Stress test relief gets priced in fast — markets know what to do with that. Regulatory scrutiny on insider lending is a slower burn. That kind of reform doesn't resolve in a quarter.

Names to watch: JPM, BAC, WFC, GS, MS, C. Stress test cleared. Insider lending reform — that story is just getting started.

Numbers don't lie. People do. Trade accordingly.