US Banks Clear Stress Test With No Problem
After reading an article on the recent stress test US banks were put through I have that uncertain feeling that settles at the bottom of your stomach. You know the one you get where you think you are about to be in big trouble, but you’re really not sure. Point being, the article doesn’t give much of an indication on what the results of the stress test mean except that most banks will not be required to receive additional capital to cover their losses.
Whew – that’s good! So you mean banks don’t have to borrow or receive money from other lenders to stay afloat – amazing! Sarcasm clearly, but this should shed some light on my feelings previously mentioned.
The tests were seen as a way to demystify the current standings of banks and from my standpoint have done nothing but muddied the waters. Although the markets rose a few percentage points it seems that this knee jerk reaction is the one that happens every time there is no bad news. But is no bad news really good news?
More detailed results are going to be made public on May 4th and until this time I’ll be holding my breath. I sincerely hope the positive results which they say have come from this test are only backed up by more details showing that the infusion of money from our government has been enough to prop up our major banks and get them back into profit generating machines (read as: paying us back).
Do others have thoughts on what these results will say? How do you think markets will react to mixed results from the tests?
