Wednesday, May 6, 2009

How Does Nouriel Roubini Know This?

In an op-ed in today's FT, Nouriel Roubini and Matthew Richardson write:

The tests, which measure how viable banks are under adverse economic conditions, have no “failed” category...
How do they know this?

I have been following the bank stress test story very closely and I have not seen any mention that there is no failed category. Perhaps I missed it. I don't think so.

I just completed a google search for:

"no failed category" bank stress tests

The only link that comes up is the Richardson-Roubini commentary. Could our man with the infamous wall be getting inside information from his former silent partner?

3 comments:

  1. Giethner said stress tests were designed to instill confidence in the banking system. No "failure" designation helps achieve that aim.

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  2. True, but I think RW's point is how does Roubini no about this specific fact.

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  3. they were probably saying it wont have it, b'cos of the way fed/.gov behaviour last few months. Everything will be bailedout. Rescue will be attempted at everything.

    If stress tests have "failure", whos problem is it ? best guess, it wont have "failure"...only "improvement required"

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