Fed asks banks to keep mum on stress test results

11 April 2009

US Federal regulators have told the nation's largest banks to keep quiet about their performance on government stress tests.

According to analysts, government officials want to announce the results all at once, at the end of the month.

Evidently the results of the stress tests are far worse than expected and the US Treasury department is fearful of releasing this catastrophic report on top of their earnings report,'' they said adding that the authorities are clearly scared of a market meltdown.

The stress tests are a centerpiece of the Obama administration's ongoing effort to stabilise the banking industry.

The test results will help regulators determine which banks are strong enough with current subsidies, which need more money from the government or private investors, and those not worth saving.

The letters follow public statements from bank executives about the tests, including Wells Fargo & Co chief executive Richard Kovacevich's calling the process "asinine." Bank of America Corp CEO Kenneth Lewis and Citigroup Inc CEO Vikram Pandit both have alluded to strong performance on separate, internal stress tests in recent memos seeking to build employee confidence.