Stress Test Has Industry Stressed Out
Results could fuel nationalization talk, add to uncertainty
By Cheyenne Hopkins
No matter what information regulators reveal on the stress tests of the largest banks — and what they will say is a mystery — the results are likely to renew calls to nationalize some institutions, and could further complicate efforts to stabilize the industry. Wayne Abernathy, executive director, financial institutions policy, for the American Bankers Association, said bankers may feel pressure to disclose their performance to dispel rumors about the results. “Several observers expect regulators to try and keep as much data as they can confidential — only to be undermined by banks that passed. But keeping it quiet and letting banks indirectly offer clues to the results will just make the situation worse. “The regulators will treat the stress test under the same procedures of the supervisory exams, but the good banks will look for indirect ways to hint at the results,” said Karen Shaw Petrou, managing director of Federal Financial Analytics.