The Federal Reserve will postpone the release of stress tests on the biggest U.S. banks while executives debate preliminary findings with examiners, according to government and industry officials.
The results, originally scheduled for publication on May 4, now may not be revealed until toward the end of next week, said the people, who declined to be identified. A new release date may be announced as soon as tomorrow, they said.
Regulators and bank executives are concerned about how the disclosure is handled because weaker institutions could suffer a collapse in their stock prices.
While the banks were ordered not to release the results of the stress assessments prematurely, Goldman Sachs yesterday may have provided a hint with its decision to sell bonds and shares, issuing $2 billion in five-year notes without a government guarantee and making a $750 million stock offering. A spokesman for Goldman Sachs declined to comment.
Ai note:
- Whatever information is disclosed is likely to be either too much - or even more likely - not enough for analysts, investors and the public to determine the soundness of a banking system upon which the nation’s economic growth is predicated.
- The “adverse scenario” used for the test was “disturbingly close” to current economic conditions, said Elizabeth Warren, the chairperson of the Congressional Oversight Panel for the Troubled Asset Relief Program, and a frequent critic of the government bailout programs.
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