The Stress Tests - What The Smart Money Says
'I think the results will be, on balance, reassuring. None of the 19 banks are at risk of insolvency.....There are very significant cushions in these institutions today, and all Americans should be confident that these institutions are going to be viable institutions going forward'.
US Treasury Secretary Tim Geithner (Charlie Rose, PBS Television)
'This whole process has been a fiasco. There are strongly different opinions on the conditions of these banks. This has aggravated it without necessarily settling anything. The majority of the sentiment is that the stress test results (will be) too optimistic'.
Bert Ely, banking consultant, Ely & Co (CNBC)
'The market likes the certainly of putting numbers on the worst-case scenarios of how much capital these banks need'.
Chris Armbruster, analyst, Al Frank Asset Management (Reuters)
'What is positive is that there's a line being drawn. There's a number being put on the table'.
Jim Reichbach, vice chairman, Deloitte (The New York Times)
'It doesn't change anything fundamentally. You cannot continue to have non-performing assets grow at 50% a quarter. Losses will swamp earnings'.
Paul Miller, banking analyst, FBR Capital Markets (CNBC)
'This is sending a message that the banks need more capital, but their losses are manageable and the system is solvent. Whether it sticks is something else'.
Kevin Fitzsimmons, analyst, Sandler O'Neill (The New York Times)
'There's a lot of cynicism over the results of these tests. But US authorities cannot afford to get them wrong. Should these large firms come back to the table for more capital after being given the all-clear by Fed and Treasury, the financial markets will cease up, equities will hit new lows, and we will be back to where we were immediately after the fall of Lehman'.
Vic Daniels, Editor, Here Is The City