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Stress Test Results

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By Guest Author - May 7th, 2009, 5:00PM

http://www.federalreserve.gov/newsevents/press/bcreg/20090507a.htm

For release at 5:00 p.m. EDT
The results of a comprehensive, forward-looking assessment of the financial conditions of the nation’s 19 largest bank holding companies (BHCs) by the federal bank supervisory agencies were released on Thursday.

The exercise–conducted by the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation–was conducted so that supervisors could determine the capital buffers sufficient for the 19 BHCs to withstand losses and sustain lending–even if the economic downturn is more severe than is currently anticipated. In a detailed summary of the results of the Supervisory Capital Assessment Program (SCAP), the supervisors identified the potential losses, resources available to absorb losses, and resulting capital buffer needed for the 19 participating BHCs.

The SCAP is a complement to the Treasury’s Capital Assistance Program (CAP), which makes capital available to financial institutions as a bridge to private capital in the future. Together, these programs play a critical role in ensuring that the U.S. banking sector will be in a position of strength.

• Statement by Chairman Ben S. Bernanke

• Overview of Results (333 KB PDF)

Related information
• Joint statement by Federal Reserve, Treasury, FDIC, and OCC on Treasury Capital Assistance Program and Supervisory Capital Assessment Program (May 6, 2009)

• The Supervisory Capital Assessment Program: Design Summary (287 KB PDF)

• Agencies to Begin Forward-Looking Economic Assessments (February 25, 2009)

PERMALINK
Category: Bailouts, Credit, Federal Reserve, Think Tank.

Comments

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

8 Responses to “Stress Test Results”

  1. leftback Says:
    May 7th, 2009 at 6:06 pm

    No surprises whatsoever – due to the carefully managed leak of information. One wonders how the XLF will be able to rally – now that there is no news remaining to be released that can be interpreted as “not as bad as expected”.

    Attention now moves on to the stories of the summer: the incipient meltdown in commercial real estate and a likely second wave of foreclosures after the end of the moratoria. “Pull up a chair, we’re just getting started.”

  2. bonghiteric Says:
    May 7th, 2009 at 7:52 pm

    Take a look at the table and accompanying footnotes on the front page of the WSJ this morning. I find it interesting that “No information” is available for BB&T, PNC, SunTrust, 5/3, State St., Regions, KeyCorp and US Bancorp.

    This is a surprise to me, leftback, because I can’t for the life of me understand how ~200 regulators can (in 2-3 months time) dissect the balance sheets of the largest banks in the universe and determine the necessary required equity (and I’m with Bove on the TCE issue), yet can’t come up with the necessary capital for the regionals? SunTrust is holding crappy CRE CMBS and don’t have nearly the amount of SPE’s and off-balance sheet items that say, C, has.

  3. bonghiteric Says:
    May 7th, 2009 at 7:53 pm

    Also interesting (to me anyway) that BB&T and USBancorp are two of the banks not required to raise equity

  4. Market Minds » Stress Test Results Says:
    May 7th, 2009 at 8:04 pm

    [...] the original post here: Stress Test Results Leave a comment | [...]

  5. rktbrkr Says:
    May 7th, 2009 at 8:25 pm

    Lets hear it for AIG, lost over $4B but was able to pay out 400M in (previously undisclosed)bonuses. I think Tiny Tim has been too rough on them. If it wasn’t for these bonuses they – I mean we – would have lost much more.

    I wonder how much AIG is going to cost us when this is all over?

  6. rktbrkr Says:
    May 7th, 2009 at 8:26 pm

    Think GMAC will have any trouble raising 13B private capital?

  7. rktbrkr Says:
    May 7th, 2009 at 8:33 pm

    This is absurd,GMAC is a complete basket case, not even a real bank and they are one of the immortal TBTF 19? They should be liquidated, thats the obvious rational solution.

    http://money.cnn.com/news/newsfeeds/articles/djf500/200905071901DOWJONESDJONLINE001091_FORTUNE5.htm

  8. rktbrkr Says:
    May 8th, 2009 at 7:12 am

    Ahhh,GMAC can’t be allowed to fail because GM (which might be allowed to go BK (not sure yet) and Chrysler,which is bankrupt, need GMAC.

    GMAC, Among the Weakest, Seems in Line for a Bailout
    By MICHAEL J. de la MERCED
    NYT May 8, 2009
    http://www.nytimes.com/2009/05/08/business/08gmac.html

    It looks as if one more bank needs a bailout. And, four months ago, this bank was not even a bank.

    The company is GMAC, the onetime finance arm of General Motors, which itself seems to be hurtling toward bankruptcy.

    The results of bank stress tests disclosed Thursday showed that GMAC is in dire straits. Federal regulators determined that GMAC must raise a staggering $11.5 billion in capital, the equivalent of roughly half its current equity. G.M. is in no position to help.

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