build confidence in your Western banking system - run mock stress tests every few months - [MONEY]

Zenaan Harkness zen at
Fri Jun 21 17:11:00 PDT 2019

"Plunge protection teams", "stress tests", "liquidity phone calls",
wash, rinse, repeat.

Cross fingers and hope like crazy folks believe you when you say


The greatest way to build confidence in your global banking system,
like ever?
  All Banks Pass Fed Stress Test... Would Lose $410 Billion

    Having been told numerous times that banks "are in far better
    condition now than before the crisis," we should not be at all
    surprised that all major banks passed The Fed's "adverse
    scenario" stress test.

    As The FT reports, US banks would lose $410bn if there were
    another severe global recession, but would maintain enough
    capital to keep lending to companies and individuals, according
    to US regulators. Eighteen of the country’s largest banks all
    passed the first round of their annual stress tests on Friday, as
    Federal Reserve figures showed the US financial services industry
    is well-enough capitalised to weather a worst-case scenario
    economic downturn.

    Wondering how terrifying the adverse scenario is... well it is
    certainly a big drop BUT expectations that it will all be
    forgotten in a couple of years seems a little ambitious if we
    ever see these kind of collapses again...

    Randal Quarles, the vice-chairman of the Fed in charge of banking
    oversight, said on Friday:

      “The results confirm that our financial system remains
      resilient. The nation’s largest banks are significantly
      stronger than before the crisis and would be well-positioned to
      support the economy even after a severe shock.”

    So why did The Fed abandon its normalization of the balance

    As Bloomberg reports, results posted so far show banks are
    getting better at coping with what’s become one of the most
    rigorous supervisory efforts: They maintained a collective common
    equity Tier 1 ratio that was double the regulatory minimum even
    at the depths of the theoretical recession. Lenders have been
    building capital for years, and while this year’s exam was
    harsher on credit-card loans, trading losses were down from last
    year at four of the five biggest Wall Street firms.

    Goldman Sachs and Morgan Stanley improved on last year’s poor
    results in the first round of the latest Federal Reserve stress
    tests, a sign they may have more flexibility to boost payouts to

[As long as interest rates stay at or literally below zero, tha banks
 cin cash up to the hills and thus be "strong in their ability to
 support the economy" - no real surprise when you can literally print
 as much money as you could ever want - so why bother with interest
 for anyone at all?  Oh right, control - that's right, normal sheeple
 must be under the thumb...]

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