Stress Tests Expected to Show Confidence in Banks

Administration ready to say bailout worked
By Ambreen Ali,  Newser User
Posted May 4, 2009 6:46 AM CDT
This graphic shows the market capitalization for the banks included in the Federal Reserve's stress test.
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(Newser) – The top US banks may not be as deep in the mud as analysts fear, government "stress tests" out Thursday are expected to show. Officials seem ready to argue that the nation's financial system is recovering and won't require more bailout funds from Congress. "None of these banks are insolvent," one tells the New York Times. "These are manageable losses."

The reports are expected to forecast deep losses for the 19 banks in some sectors of their credit portfolios, but may argue that many now have a greater cushion than banks did in past financial crises. If the tests fail to instill confidence, the Obama administration may have to secure more bailout money or take over some banks, writes David Leonhardt.