Most Banks Pass ‘Stress Tests’


“Most banks currently have capital levels well in excess of the amounts needed to be well capitalized,” reads the report analyzing the health of the nation’s nineteen largest financial institutions, which was released by the federal government just now. The tests were designed to use a number of varying economic and financial circumstances to see how these institutions’ balance sheets would hold up. The eventualities included a worsening of the recession, increased unemployment, and further foreclosures. Anticipation that most banks would pass the test led to a bounce in the markets this morning. As analysts interpret the early reports of the stress test (official full results will be released on May 4), there is expected to be a scramble on the Street — immediately after the announcement, the Dow dropped over sixty points, but it’s now climbing again.

Most Banks Have Enough Capital After Stress Tests: US [CNBC]