I think the larger question is whether the tests will be transparent. If the markets can figure out the curve, they can discount it. If they can’t, the markets will probably assume the stress tests are meaningless.
I think the stress tests will end up being meaningful but arbitrary. If you’re a bank that’s big enough, you’ll effectively pass no matter how insolvent.
I think the larger question is whether the tests will be transparent. If the markets can figure out the curve, they can discount it. If they can’t, the markets will probably assume the stress tests are meaningless.
I think the stress tests will end up being meaningful but arbitrary. If you’re a bank that’s big enough, you’ll effectively pass no matter how insolvent.
We’ll wake up one weekend morning to find that banks have been nationalized..it’s coming..