U.S. May Soon Release Bank Stress Tests

Move Seen As Way To Quiet Rumors Over Health Of Nation's Largest Financial Institutions

(CBS)  The Obama administration is working on plans to disclose the results of financial "stress tests" undergone by the nation's 19 biggest banks, according to a New York Times report Wednesday.

The move comes earlier than anticipated and is designed to soothe nervous investors who might otherwise avoid banks thought to be the weakest.

The stress tests are supposed to gauge a bank's financial health, specifically whether it has enough cash on hand to weather a continued economic downturn. Banks without enough capital could get more federal funds to meet their needs.

Last week, the Federal Reserve ordered banks to keep the test results a secret, as government officials expected to formally release the results later this month. As the Times points out, the government usually does not disclose results of bank evaluations for fear of sending investors and depositors fleeing.

But Goldman Sachs' recently announced plans to raise $5 billion in capital to pay back government bailout funds - a move suggesting executives are confident in their own test results - has pressured other banks to follow suit or risk looking weak, the Times reports.

"The purpose of this program is to prevent panics, not cause them," an unnamed senior official told the Times. "And it’s becoming clearer that we and the banks are going to have to explain clearly where each bank falls in the spectrum."

The government may now ask banks to release some of the information likely to come out in the results, such as how much capital they would require to survive specific hypothetical crises.

According to a Treasury Department official, the stress tests are still underway, so any released information may not provide a complete picture.

The financial markets seem to be stabilizing in recent weeks. Goldman's announcement Monday of $1.66 billion in profit for the last quarter followed Wells Fargo's surprise revelation last week that they turned record profit during the same period.

Citigroup and Bank of America have also signaled positive results for the quarter. The financial sector has bolstered Wall Street recently, as rediscovered investor optimism has advanced the Dow Jones industrials more than 20 percent in the last five weeks.

[emperorlotku]

The disgusting part of this is that if you do the math that means these firms spent 500.000.000.00 a year over ten years, which if we have approx. 500 senators and representatives, that's 1,000,000.00 per politician per year to purchase their corporate owned legislators, Both Republican and Democrat corporate owned legislators. ..
" A group called Wall Street Watch is out with a report that finds that ?Wall Street investment firms, commercial banks, hedge funds, real estate companies and insurance conglomerates made $1.7 billion in political contributions and spent another $3.4 billion on lobbyists?"
Posted by pepperwood2 at 11:37 AM : Apr 15, 2009
+ report abuse + permali

[PVperson2]

mortar29, I read the news every day and I have NOT read an article that says "Obama won't let banks repay TARP', who's your source? Oh, I forgot, you have that tinfoil hat...................

[PVperson2]

Gee, if the economy is recovering and the worst is over, do you think the neo-cons will give Obama credit or just keep on carping? Why do I even ask, we all know the answer, the GOP only knows complaint and refusal to face reality.

[bhuddaflii]

and i guarantee u that the books r cooked. if you believe anything this corrupt banker/gov't tag team has to say, then... u deserve everything u get.

[poeticaintit]

Why is it that Obama wont let some of the banks pay back the TARP money?
Posted by mortar29

Could be the government (Geithner) wants control for seizing 'threats of failure'....of course he wants blanket authority...regardless stimulus status. But Obama's Administration is not socialist....besides it's not the first time this has happened and it's not like a lot of our entitlement programs aren't already socialist...

this is the crazy kind of logic liberals use to justify moving us toward socialism....now you see why liberals should be sent to Cuba for intervention and cleansing?

[whitemale08]

The illegal Federal Reserve System is bankrupt and needs to be shut down IMMEDIATELY!

How in the hell is Treasury supposed to trust an independent self preservant entitiy like the Fed to be honest about so-called 'stress tests'?

How is Goldman Smacks, JP Morgan and Bank of America going to be honest when they have trillions and trillions of worthless toxic derivatives and credit-default swaps on their books?

HOW?

CALL CONGRESS AND SAY 'NO MORE BAILOUTS'!!!!

[pepperwood2]

Why this can't be happening? Wait until BO & Congress find out? They'll be replacing another batch of CEO's. The nerve of these Banks. How can they get away with this under the noses & watchful eye of the President & Congress? Why you would think they're in this thing together. Charging excessive fees & charges along to the consumer so they can pay off their debt. Why we'll show them. We'll just go out an borrow more to run our personal debt up to help them out. cackle cackle cackle. Fooled you twice.

A group called Wall Street Watch is out with a report that finds that ?Wall Street investment firms, commercial banks, hedge funds, real estate companies and insurance conglomerates made $1.7 billion in political contributions and spent another $3.4 billion on lobbyists?

[gmarker3]

So the Fed has forbidden the banks from talking about the stress tests. The Fed will decide what information, results, and spin they want the public (investors) to be spoon fed. Love that transparency from the Obama administration. My investments will go only to banks that refuse TARP funds.

[jxknowles]

My guess is all the entities that received TARP money will fare reasonably well. That would be good news. I'll be interested to see the actual amount of Federal funds that were lost or not repaid.

[rickwar98]

And, they are doing a bang up job bankrupting us, our children, our grand children, etc,etc
Posted by janem4 at 8:05 AM : Apr 15, 2009

Know how many times we've heard this? Too many, right from the start of the US.

[rickwar98]

Bill Clinton (democrat) started this whole mess with Fannie Mae & Freddie Mac.....It just snowballed from there, and here we are in a mess started by the Democraps......So, seriously 121, do you really know where you are coming from?
Posted by willow0313 at 9:02 AM : Apr 15, 2009

Oh, Bulls**T

[bartleby42]

Wow there really are some dumb people here... it kind of makes you wonder why people haven't been trying to dig up information on the economy and hold their 'representative government' accountable as the norm, rather than only when the media tells them to be pissed off. That Clinton stuff is a joke, if Clinton is the earliest president you know of it can be understandable... the concept of government funded entities allowed to run themselves as corporations might never be too bright, but as long as you buy into the "socialism" **** that gets thrown around washington, it will probably continue (as since, well, when willow0313?.. you seem to know a lot).
Vote Satan

[Andrew_Ottiger]

In all probability, the report will be positive (relatively speaking). If the results were mostly or overwhelmingly bad, they would not disclose it so publicly ? and certainly not ahead of schedule. It is probably done this way to build confidence in the markets and in the populace.

[seriously121]

OK what happens when this all works out in the end? Will anybody give credit where credit is due? I'm sure no one will. Nobody did the other day? So I don't expect they will when it's a positive in the end. I just hate everyone blaming the dems. I apologize and I don't mean any harm but I'm sure you where I'm coming from.

[seriously121]

Just anything against the current administration....big word CURRENT!!!! How did we get here? For the love of Pete, PLEASE???!!!!

[WayAround]

"the results of financial 'stress tests' undergone by the nation's 19 biggest banks...designed to soothe nervous investors who might otherwise avoid banks thought to be the weakest"

In other words, people are being encouraged to use the large banks, and small banks will be taken over by the FDIC. The "too big to fail" get bigger. It's called consolidation, folks. With less banks to oversee, the International Mafia's management duties become easier.

[grabandgo]

No problem, tax cheat timmy and nobama have it all under control.

[pepperwood2]

Last week, the Federal Reserve ordered banks to keep the test results a secret, as government officials expected to formally release the results later this month. But Goldman Sachs' recently announced plans to raise $5 billion in capital to pay back government bailout funds

This isn't a really hard nut to crack. The banking monopoly with the help of BO'S congress are going to concoct a PR report to make jest of all this. The bottom line is for the people to fall for this scheme and borrow at record amounts from Banks.

Then with the backing of the Government the Banks can legally construe any additional fees, charges, penalities, with the help of the Federal Reserve, that they see fit on us po & working Folks. Its pay back time. Pretty slick trick - don't you know.