Banks' Stress Tests Prompt Investor Concerns

Banks' stress tests prompt investor concerns

Investor concerns regarding the government's stress tests of the nation's largest banks fall into four categories. Investors are worried about a lack of transparency. "It does depend on how transparent they are," said Dave Lutz of Stifel Nicolaus. "The market hates the unknown more than it hates bad news." There is also a concern that none of the banks will actually "fail" the test or that market participants will not believe the results. Finally, there are concerns that stocks are bound to decline no matter the outcome. CNBC  (full article)

 

Regulators to explain methods for banks' stress tests
Before releasing results of stress tests of the nation's 19 largest banks, regulators will publish a paper on how the tests were carried out. "The more markers or sign posts you can put on the path, the more helpful it will be," said R. Scott Siefers, managing director at Sandler O'Neill & Partners. "There are a lot of questions in investors' minds." Bloomberg
 

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