Fed says help for stress-tested banks available

[PBS Poll-435]

All 19 institutions subject to examination won’t be allowed to fail

Associated Press
updated 12 minutes ago

WASHINGTON - The Federal Reserve says the government is prepared to rescue any of the banks that underwent "stress tests" and were deemed vulnerable if the recession worsened sharply.

The Fed says the 19 companies that hold one-half of the loans in the U.S. banking system won't be allowed to fail — even if they fared poorly on the stress tests.

The tests are intended to measure whether banks have enough capital to withstand losses on mortgages and other assets if unemployment rises and home prices fall further.

Investors had feared the tests would highlight some banks' vulnerability to failure.

[PBS Poll-435]

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