1
Bank Wrangling Softened Stress Test Results
Fed massaged some figures to portray banks as healthy
By Rob Quinn
|
Posted May 8, 09 5:40 AM CDT
|
Share
(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.
The result reassured investors, although many banks are still chafing at the results. Wells Fargo—which raised $11 billion to take Wachovia off the government's hands last year—called results showing it needs to raise $13.7 billion "excessively conservative." "They did the government a massive favor," one analyst says. "And the government returned it by saying: 'Screw you. Go out and raise more capital.' "