Treasury’s bank “stress tests” becoming a mess

School of Law Professor Cornelius Hurley, director of the Morin Center for Banking and Financial Law and former counsel to the Fed Board of Governors, says Treasury’s “stress tests” for top U.S. banks is a mess because it only disclosed the test methodology just before the test results will be made public.

“For credibility purposes, this methodology would have been better had it been released at the beginning of the process rather than at the end.  On the eve of the stress-test results release it reads more like a rationalization than a game plan.

“Indeed, the Treasury maneuvered itself into an almost impossible situation with the way it handled this issue.  Absolve the banks and who would believe the results.  Name the capital-deficient banks and the only thing that keeps them alive is the generosity of the U.S. taxpayer.  Quite a mess.”

Contact Cornelius Hurley, 617-353-5427, ckhurley@bu.edu

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