Fed orders new 'stress tests' for banks

AAP ^ | 11/18/10

[TigerLikesRooster]

Fed orders new 'stress tests' for banks

On Thursday 18 November 2010, 7:15 EST

The largest US banks must undergo new stress tests to show they can weather another recession, and the Federal Reserve said those that pass them can boost dividends paid to investors.

Banks would need to show the Fed's bank examiners that they're in good financial health and that they have adequate capital to absorb potential losses over the next two years.

The Fed oversees Wall Street's biggest banks, including Citigroup, Bank of America, JPMorgan Chase & Co, and Wells Fargo.

Banks have to file plans to the Fed showing that they would have sufficient capital cushions to cover any losses under different economic scenarios - including if the economy were to fall back into a recession, Fed officials said.

All of the 19 largest banks overseen by the Fed must file the plans - even if they don't intend to increase their dividend payments. The plans must be filed by Jan. 7, 2011.

[TigerLikesRooster]

P!

[bruinbirdman]

History has shown that bank stress test results are bogus.

yitbos

[The Comedian]

This will let the Fed know exactly how much more tax money each of the giant banking polyps will receive in QE2, and how much they will need to absorb the smaller, responsible banks that will be driven out of business by higher Fed fees.

Frowning takes 68 muscles.
Smiling takes 6.
Pulling this trigger takes 2.
I'm lazy.

[B4Ranch]

That’s the plan.

[RicocheT]

Another “stress test” will cause more uncertainty, more delays in getting loans out to businesses of all sizes for materials and order fulfillment and further delays in hiring American workers to do production.

Omama & crew are clueless on how to restart the economy, they just are repeating their prior mistakes. I don’t care if our banks are tweaking balance sheets, I just want them to again make loans necessary for businesses to get going. A coming repeat stress test just makes banks borrow cheap money from the Fed and sit on it, instead of making loans.

[Freddd]

They don’t want to restart the economy.

They want fundamental transformation.

[Neidermeyer]

And that fundamental transformation is known as HR 3808 ... retroactively legalizing all the illegalities perpetrated on us by wall street over the last 10 years..

[Montfort]

Is it possible that an announcement of new stress tests is a suggestion to banks to buy more US government debt?

[A Strict Constructionist]

Ginning up for a bank takeover. You have to find some kind of excuse. Anyone believe the results from these tests?

[GOPJ]

The last ‘stress tests’ were a joke. These will be too unless the politics have changed.