Reports: Nervous about stress test results, U.S. delays release
— -- The Federal Reserve will release stress tests results for the nation's biggest banks on Thursday, not Monday as planned, a government official told the Associated Press.
The results are a key part of the Obama administration's economic recovery plan, but the government has big worries about how to deliver the results without hurting the banks' reputation or scaring financial markets.
Deliberations between banks and regulators about the tests' results pushed back the release date.
There have been indications the government is proceeding cautiously in releasing the results. The government gave its preliminary results to the banks on April 24. And after initially saying that the results would be released publicly next Monday, the government backed away from giving a specific date, fanning speculation it would not happen until midweek.
In addition to an overall snapshot of the health of the 19 large banks being assessed, the Fed will provide detail about individual banks, according to the official, who spoke on condition of anonymity because of the sensitive nature of the matter.
The Fed will describe the resources banks would need to absorb losses on certain types of loans and investments under adverse economic conditions.
Investors want to get a lot of details, such as exactly which banks need extra capital, how much capital is needed, and how it will be raised.
The public release of the results will culminate a process initiated in February by the Federal Reserve and other bank regulators that put the nation's 19 largest banks through rigorous tests to determine if they are healthy enough to endure a worsening economy over the next two years and still be able to provide credit to the families and businesses that need it.
For instance, if the government said a bank needed to raise capital but not how much it needed to raise, it would "have us wondering how much trouble the bank is in and that maybe I should get my money out," Wallace says.
