Former deputy Comtroller of the Currency Robert R. Bench, now senior fellow at the School of Law’s Morin Center for Banking and Financial Law, says the Fed’s “stress tests” on the nation’s largest banks will help clarify the murky state of the industry.
“The very good news with these stress-test results is that policymakers have acquired a solid view of the conditions of our largest financial institutions face going forward and the amounts of capital cushion necessary to meet those conditions.
“Policymakers had one last shot at getting this right and they are going at it with an abundance of caution, ordering those institutions to get much more tangible common equity. A systemic uncertainty is being eliminated.”
Contact Robert Bench, 617-353-5428, email@example.com