May
13th
Wed
13th
As an actual “stress test,” however, the exercise was a joke. We’re now officially pursuing the Japanese response to the banking crisis, which is to say nursing along sick banks with favorable accounting policies (tweaking mark-to-market), taxpayer money, and government forebearance.
“…we’re still looking at $7.8 trillion in total assets at risk in these banks, and despite being on the edge of insolvency only weeks ago, we are asked to believe that they will need less than 1% of this amount – $74.6 billion – of additional capital even in a worst case scenario.”
