Teaching to the Test
The Indispensable Man has made a big deal about the "stress tests" that the Treasurt Department has been performing on some of America's biggest - and most troubled - banks. But, they're not sure what to do with what they are learning: Banks Await Stress-Test Results
It isn't clear precisely what information the government might disclose. It remains possible the data won't be specific to individual banks. But some within the administration believe a certain amount of information needs to be released in order to provide assurance about the validity and rigor of the assessments. In addition, these people also are concerned that the tests won't be able to fulfill their basic function of shoring up confidence unless investors are able to see data for themselves.
Staff at the various regulatory agencies have been discussing the matter for several weeks and are expected to brief top regulators as soon as this week. One possible solution: Aggregating the data provided by the banks so the government could provide a broad snapshot of the banking industry's health without disclosing firm-specific data.
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