Straight Up Stress Tests

Is your bank stressed? The tests are in and 10 out of 19 banks tested did not pass. Here’s some of the opinion swirling around the stress tests.

Douglas McIntyre at Daily Finance broke down the three categories of stressed (or not so stressed) banks, and how they will proceed from here.

Based on the leaked information and how the banks stocks have traded over the last week, Wall Street believes that most banks are in relatively good shape. What should concern investors is that, if the economy does not get better soon, then the “stress tests” were not rigorous enough and the banks will have to go through another round of recapitalization later this year or early in 2010.

The Baseline Scenario looked at the stress tests from a PR spin perspective.

The public relations campaign packaging the bank stress tests is kicking into high gear and our professional information managers are really hitting their stride.  They face, of course, a classic spin problem: you need to get the information out there, but you don’t want to be too definitive on the first day or soon after – if you’re easy on the banks, that looks bad; if you’re tough on the banks, that might be dangerous.

Simon Maierhofer speculated on the stress tests’ effect on the market.

As we’ve found out, just the perception that a bank isn’t safe can create a run on the bank. Such a run on the bank (defined as too many customers withdrawing their money at the same time) is exactly what “killed” Washington Mutual. Regardless of the results, we can be sure that the government will do what it takes to avoid a run on any of the banks undergoing the stress test.

George Stephanopoulos bottom lined it: Obama won’t need more TARP money from Congress this year.

That clears the congressional decks for the rest of the Obama agenda — especially health care.

And click here for Mike Keefe’s cartoon on stress tests.

Image Credit: Anonymous9000, Flickr