Federal Reserve: Banks ‘Stress Tests’ Results to Be Postponed

The Federal Reserve plans to delay the release of any completed ‘stress tests’ results on the nation’s largest banks while executives debate preliminary findings with examiners, Bloomberg reported late Thursday night, citing government and industry officials.

From Bloomberg: The results, originally scheduled for publication on May 4, now may not be revealed until toward the end of next week…. 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.
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“Everybody understands they’ve got a tiger by the tail here,” said Mark Tenhundfeld, a senior vice president at the American Bankers Association in Washington. “If they don’t let him go gently there will be a lot of mauling going on.”

Bank regulators seem to have reconciled at this point their own versions of the results with the banks’ internal assessments. Hopefully they will adopt the right strategy when disclosing the results  and avoid complicating stock market reaction.

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