These tests were like a crash test done at 15 mph with no test done at 30, 50 or so on. The banks wanted a test done at 1 or 2 mph for public appearances. When it looks like we are going to crash at 80. So you can see where this will go.
When the Fed last month informed banks of its preliminary stress-test findings, executives at corporations including Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. were furious with what they viewed as the Fed’s exaggerated capital holes. A senior executive at one bank fumed that the Fed’s initial estimate was “mind-numbingly” large. Bank of America was “shocked” when it saw its initial figure, which was more than $50 billion, according to a person familiar with the negotiations.
I do think it was the the banks complaining about the stressfulness of the tests though. Which Ironically, will be tremendously off in the other direction.
The fed was a little more correct on this one but the banks wanted a rally so they bargained for a better number.
The whole thing was just a publicity stunt that means nothing. If these guys built bridges we would be dead.
