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Stressing to the finish line

Business Times - 07 May 2009

COMMENTARY
Stressing to the finish line

But Bernanke seems to have reassured markets that US bank stress test results won't have big surprises

By LEON HADAR
WASHINGTON CORRESPONDENT

THE 19 big US banks' stress test results are set to be finally made public by the Treasury Department after the financial markets close today in New York (early tomorrow morning, Singapore time). And Federal Reserve chairman Ben Bernanke, addressing Congress on Tuesday, tried to calm the markets by downplaying the possibility that the government would ask Congress for a new infusion of taxpayer money into ailing banks.

In fact, the Treasury Department and the Fed began releasing information about their stress test on major banks by providing the banks with the preliminary results 12 days ago.

The Fed also released its methodology ahead of a public announcement of the results. It indicated that the banks had to run their portfolios against assumptions about the potential …