build confidence in your Western banking system - run mock stress tests every few months - [MONEY]
Zenaan Harkness
zen at freedbms.net
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
!!! EVERYTHING IS AWESOME !!!
The greatest way to build confidence in your global banking system,
like ever?
https://www.zerohedge.com/news/2019-06-21/all-banks-pass-fed-stress-test-would-lose-410-billion
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
sheet?
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
shareholders.
...
[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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