Feds May Reveal Which Banks Are Weakest

Fed massaged some figures to portray banks as healthy

(NEWSER) - Some major banks managed to cajole the government into using more optimistic figures in its "stress test" results, insiders tell the Washington Post. Banks like Citigroup—eager to show they were healthy and didn't need more help from the government—were given credit for pending moves to raise capital, resulting in the report showing shortages of capital well below what many experts had predicted. More»

(NEWSER) - The Treasury may have to expand its toxic asset programs and repeat stress tests, particularly for smaller banks, a US bailout watchdog panel finds. While larger banks have begun to recover, smaller financial institutions remain exposed to billions in losses from outstanding commercial property loans and are still unable to raise capital, the report concludes. More»

But Fed chief is encouraged by bank response

(NEWSER) - Big banks' response to "stress tests" has been encouraging but they will need to watch out for risks not covered by the tests, Ben Bernanke warned regulators yesterday. The Fed chief—signaling that investment giants like Goldman Sachs can expect tighter scrutiny—said banks should self-test for potentially disastrous "operational, liquidity and reputational risks," Bloomberg reports. Bernanke warned that the financial situation remained fragile, and that the government was prepared to inject more capital to shore up the system. More»

Investors find causes for optimism in capitalization news

(NEWSER) - Leaked results of the stress tests on America's biggest banks separate sufficiently capitalized banks—including JPMorgan Chase, MetLife, AmEx, and Goldman Sachs—from underfunded ones such as BofA, Wells Fargo, and Citi. Bank shares rose sharply yesterday and today, and some investors said the results were better than they feared. The Wall Street Journal writes that weak banks might have trouble enticing the private investors they'll need, while the New York Times is more optimistic, saying "the big bailouts for the banks may be over." More»

(NEWSER) - At the behest of the Federal Reserve, the 19 biggest US banks are projecting their losses on 12 categories of financial product such as loans and mortgage securities, the New York Times reports. The Fed, which asked the institutions to project a hypothetical scenario of a “stressed economic environment,” made outlines of its criteria public today. More»