A little stress over bank test results
TEXT OF STORY
Steve Chiotakis: Now, the key to stabilizing markets is to get confidence back in the game. That’s how the Obama administration wants to play by releasing information on the nation’s 19 largest banks. Reports this morning say there could be a move in the next week to give out certain information on the government’s bank stress tests. Here’s Marketplace’s Dan Grech.
Dan Grech: When regulators run stress tests on a bank, the results are usually kept private. That way the bank will be more forthcoming.
So when the Treasury began the mother of all stress tests on the nation’s 19 biggest banks, it promised to be discreet.
But the government didn’t consider the world financial system could turn on the results.
Rob Cox: It’s really kind of a conundrum that they’ve put themselves in. I’m not sure the Treasury thought this thing completely through when they launched it a couple of months ago.
Rob Cox is with the financial Web site BreakingViews. The Treasury hopes by releasing some data on banks, it will restore confidence in the overall financial system. But Cox says the government can’t say too much.
Cox: You didn’t want to show the one guy in the class to have a D while everyone else is walking around with B pluses for fear you might spark a bank run.
Treasury is now preparing a public guide to explain how to interpret the results.
I’m Dan Grech for Marketplace.
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