Feds to Release 'Stress Test' Parameters April 24

By Linda McGlasson, April 17, 2009.
Feds to Release 'Stress Test' Parameters April 24

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he federal banking regulators say they plan to release details of the stress tests being conducted on the country's 19 biggest banks in two stages.

The Federal Reserve and other banking regulators will release on April 24 a white paper outlining how they conducted the tests to assess the firms' health. The white paper will include assumptions about the losses firms could face for loans and securities under an array of various economic scenarios.

On May 4, the regulators will release the second part of the tests -- the results. It is not clear how much information will be released about specific firms. It is expected the results will show which firms need to raise capital and how much.

The way the results are disclosed is seen as a delicate process. Investor and customer perceptions of an institution's health may affect the way they operate. Weak-looking firms may be challenged to keep customers and may also face problems in raising money from private markets.

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