NEW YORK — It was the banking industry’s equivalent of Judgment Day: Dark-suited bank executives called into top-secret meetings with Federal Reserve officials to learn whether their institutions might live or die if the economy took a sharp turn for the worse.
The disclosure of the stress-test results for the nation’s 19 biggest financial firms made for high drama on Wall Street, which buzzed with anticipation even though the banks’ report cards won’t be made public until early next month.
Bank executives learned their grades in meetings at Federal Reserve banks across the country. The proceedings were shrouded in secrecy. By law, the banks can’t publicize the results without the government’s permission. Most banks refused even to confirm that the meetings took place.
About the tests
The stress tests are among the ways the government has tried to restore confidence in banking amid the gravest financial crisis since the Great Depression.
The air of mystery fed Wall Street’s anticipation. On the financial news network CNBC, a countdown clock ticked away the seconds until the Fed’s release of the methodology used to conduct the stress tests.
Financial stocks mostly rose after the Federal Reserve said the government would rescue any of the 19 financial companies if they became weakened by a deeper recession.
Giving the banks their results Friday, more than a week before they’re to be released, is supposed to give them time to process the data internally.
The Fed, which is overseeing the tests, asked banks not to reveal their results during quarterly earnings announcements. Regulators worry investors might batter those banks without any good news to announce. Many banking experts who say it’s difficult to predict how the results will be received.
Bert Ely, a longtime banking analyst, said he worried the tests could backfire by unnecessarily alarming investors.
"We’re going to get a warts-and-all look at the banks, and the market may overreact,” he said.
Most banks refused to discuss any aspect of the tests. Only one, PNC Financial Services Group Inc. even confirmed that it met with regulators.
by the associated press
The disclosure of the stress-test results for the nation’s 19 biggest financial firms made for high drama on Wall Street, which buzzed with anticipation even though the banks’ report cards won’t be made public until early next month.
Bank executives learned their grades in meetings at Federal Reserve banks across the country. The proceedings were shrouded in secrecy. By law, the banks can’t publicize the results without the government’s permission. Most banks refused even to confirm that the meetings took place.
About the tests
The stress tests are among the ways the government has tried to restore confidence in banking amid the gravest financial crisis since the Great Depression.
The air of mystery fed Wall Street’s anticipation. On the financial news network CNBC, a countdown clock ticked away the seconds until the Fed’s release of the methodology used to conduct the stress tests.
Financial stocks mostly rose after the Federal Reserve said the government would rescue any of the 19 financial companies if they became weakened by a deeper recession.
Giving the banks their results Friday, more than a week before they’re to be released, is supposed to give them time to process the data internally.
The Fed, which is overseeing the tests, asked banks not to reveal their results during quarterly earnings announcements. Regulators worry investors might batter those banks without any good news to announce. Many banking experts who say it’s difficult to predict how the results will be received.
Bert Ely, a longtime banking analyst, said he worried the tests could backfire by unnecessarily alarming investors.
"We’re going to get a warts-and-all look at the banks, and the market may overreact,” he said.
Most banks refused to discuss any aspect of the tests. Only one, PNC Financial Services Group Inc. even confirmed that it met with regulators.
by the associated press
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