Thursday, 30 April 2009 20:00

Quick opinion on bank stress tests

I recently recieved this question via email, and have put my reply below:

Reggie,

  I would like to know if you thought the stress test results would be too tough, too lenient, or just right, given that (per Bloomberg), some 6 out of the 19 banks need to raise more capital.

  Personally, I think the real number of banks failing the stress tests should be higher, especially because of their credit default swap exposure, etc.

  You are probably the best guy to ask about this (and I don't have a paid subscription so as to read your stress test results).

  What is your estimate about how many of the 19 banks should really fail a real stress test?

 

Thursday, 30 April 2009 20:00

Quick opinion on bank stress tests

I recently recieved this question via email, and have put my reply below:

Reggie,

  I would like to know if you thought the stress test results would be too tough, too lenient, or just right, given that (per Bloomberg), some 6 out of the 19 banks need to raise more capital.

  Personally, I think the real number of banks failing the stress tests should be higher, especially because of their credit default swap exposure, etc.

  You are probably the best guy to ask about this (and I don't have a paid subscription so as to read your stress test results).

  What is your estimate about how many of the 19 banks should really fail a real stress test?

 

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