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Big Bank Stress Test

From: "Big Bank Stress Test Tip of the Iceberg", Regine Schlesinger, WBBM Newsradio780, 5/7/09

CHICAGO (WBBM)  -- A Chicago-area economist believes the nineteen big banks the government subjected to stress tests, are just the tip of the iceberg. The story from WBBM's Regine Schlesinger.

Economist Michael Moebs of Moebs Services in Lake Bluff says the government's finding that the 19 biggest banks need tens of billions in extra capital...goes only so far. "Concentrating on just the Wall Street banks," he says, "is not going to get us out of this economy."

Applying the government's standards, Moebs did his own stress test on thousands of community banks, credit unions and other smaller financial institutions. His findings: "We're looking at approximately 75-hundred financial institution's out of 16,300 that have capital problems....The government would have to put up 451 billion dollars to assist those 75-hundred institutions."

Moebs says the 19 banks the government tested are deemed too big to fail. The smaller ones might be on their own.

Written By: vhorizon
Date Posted: 5/7/2009
Number of Views: 3295