Obama to get progress report on banks

PRESIDENT Barack Obama will get a progress report on stress tests at the 19 biggest US banks when he meets his economic team today.

For the last eight weeks, nearly 200 federal examiners have laboured inside some of the nation’s biggest banks to determine how those institutions would hold up if the recession deepened.

The exams, to conclude by the end of this month, are designed to show how much extra capital banks may need to survive a deeper economic downturn.

While the tests are a central element of the Obama administration’s financial-industry rescue, both banks and regulators are concerned over how the results will be revealed and what significance investors will put on them. One concern is that a bank’s report card could leak out during earnings conference calls. That could push stock prices lower for banks that are perceived to be weak.

Just how the tests are revealed remains under debate. Officials don’t want to put undue pressure on banks that need capital, but they aren’t inclined to keep information from the markets.

- AGENCIES

From TODAY, Business – Friday, 10-April-2009