From Bloomberg View
Updated 7 hours ago
The following editorial appears on Bloomberg View:
This week, the Federal Reserve will present the
results of stress tests designed to ensure that the largest U.S. banks
won’t turn the next financial crisis into an economic disaster. There’s
just one problem: If the tests were realistic, most of the banks would
fail....
...What, then, would a rigorous stress test say
about U.S. banks today? Researchers at New York University have created a
tool to answer the question. Drawing on the historical relationship
between banks’ stock prices and the market as a whole, it estimates what
the value of the banks’ equity capital would be if the market fell 40
percent over six months - similar to what happened in 2008. It then
calculates, based on past crises, how much capital the banks would have
to raise to be financially sound.
The results aren’t pretty. Using a start date
of Sept. 30, 2013, the same as that of the Fed’s latest round of stress
tests, the NYU model gives only one of the six largest U.S. banks -
Wells Fargo - a passing grade. The other five - JPMorgan Chase, Bank of
America, Citigroup, Goldman Sachs and Morgan Stanley - would have a
combined capital shortfall of more than $300 billion. That’s not much
less than they needed to get themselves out of the last crisis....
Published:
March 19th 2014, 1:59pm
...U.S. Senator Elizabeth Warren (click here) is launching a state-wide tour to promote her new book "A Fighting Chance" that follows her perception of how Washington really works and really doesn't. The 384-page book is set to be released on April 22 by Metropolitan Books, two days after Warren is slated to kick off her state-wide tour to promote it.
The book chronicles her life, from growing up in Oklahoma to serving in Washington under President Obama according to Macmillian Publishers. It begins with how Warren once dreamed about becoming a teacher but instead married early. Some 15 years later, she distinguished herself as a law professor with a deep understanding of why people go bankrupt....
...U.S. Senator Elizabeth Warren (click here) is launching a state-wide tour to promote her new book "A Fighting Chance" that follows her perception of how Washington really works and really doesn't. The 384-page book is set to be released on April 22 by Metropolitan Books, two days after Warren is slated to kick off her state-wide tour to promote it.
The book chronicles her life, from growing up in Oklahoma to serving in Washington under President Obama according to Macmillian Publishers. It begins with how Warren once dreamed about becoming a teacher but instead married early. Some 15 years later, she distinguished herself as a law professor with a deep understanding of why people go bankrupt....
