Results of Bank 'Stress Tests' To Be Released on Thursday

By Steve Liesman
|  Friday, May 1, 2009  |  Updated 12:30 PM EDT
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Results of the "stress tests" conducted on the nation's 19 biggest financial institutions will be released late Thursday afternoon and include information on both the individual banks as well as aggregate data, CNBC has learned.

The results of the tests, which were conducted during April, will include estimated losses in certain loan categories as well as the banks' resources to absorb potential losses, a source said. The source added that the information is not a solvency test.

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On Thursday, Reuters reported that US officials were leaning toward announcing the results of individual banks instead of just summary results. Officials also are likely to release the capital requirements of the 19 firms at their holding company level, not just the needs of their banking units, Reuters said.

 

Some of the banks being tested, such as Bank of America, have large non-bank subsidiaries that were included in the assessments, the source said.

Regulators have stress-tested the 19 largest U.S. banks to determine their capital needs should economic conditions deteriorate further.

The stress-test program has evolved since the Treasury Department announced in February that it was embarking on the exams as a way to learn what additional help the top banks might need.

Officials said at the time the banks would learn how much extra capital regulators wanted them to have, and then they would have six months to raise that amount in the private market or could tap a new government capital facility.

Since then, the market appetite for the results has reached a fever pitch, forcing the Treasury Department to rethink its plan to keep detailed results of individual banks private.

 

The source told Reuters that officials are well aware of the market's sensitivity to the information, evidenced by the punishment some bank stocks have endured from leaked reports of the results and outside analysts' versions of the tests.

"Everyone's being very sensitive," the source said.

The government gave their preliminary results to the banks a week ago, and regulators are now negotiating the results and any capital recovery plans with the banking companies.

See below for a full list of the institutions undergoing stress tests.

 

For more stories from CNBC, go to cnbc.com.

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