U.S. Planning to Reveal Data on Health of Top Banks

[Pirate Smile]

Source: The New York Times

WASHINGTON — The Obama administration is drawing up plans to disclose the conditions of the 19 biggest banks in the country, according to senior administration officials, as it tries to restore confidence in the financial system without unnerving investors.
The administration has decided to reveal some sensitive details of the stress tests now being completed after concluding that keeping many of the findings secret could send investors fleeing from financial institutions rumored to be weakest.

While all of the banks are expected to pass the tests, some are expected to be graded more highly than others. Officials have deliberately left murky just how much they intend to reveal — or to encourage the banks to reveal — about how well they would weather difficult economic conditions over the next two years.
As a result, indicating which banks are most vulnerable still runs some risk of doing what officials hope to avoid.

The decision on handling the stress tests underscores the delicate balancing act by the government, which has spent hundreds of billions to stabilize banks. Despite some signs of improvement in the financial system, many economists remain concerned that banks are still weighed down with toxic assets stemming from the housing downturn.

-snip-
“The purpose of this program is to prevent panics, not cause them,” said one senior official involved in the stress tests who declined to speak on the record because the extent of the disclosures were still being debated. “And it’s becoming clearer that we and the banks are going to have to explain clearly where each bank falls in the spectrum.”

Two senior government officials said on Tuesday that they were now likely to encourage the banks to reveal a range of information, perhaps including the size of losses the banks could suffer under each of the stress assumptions. Critics of the testing system, however, have questioned whether the hypothetical cases are extreme enough.



Read more: http://www.nytimes.com/2009/04/15/business/economy/15bailout.html?_r=1&hp

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Stress Test results will be public.

[OhioChick]

1. Should be interesting. n/t

[Pirate Smile]

2. kick