It's risky for periodic use of so-called Stress Tests in evaluation of banks’ strength:
Firstly,
publicizing the results as in the past is dangerous to the economy.
The term itself is a no-no because of its psychological implications
with regard to the economy and the stock market.
Secondly,
little of the public, and only a few in the financial community,
fully know what each test is supposed to reflect.
Furthermore,
in an emergency, the amount of capital a bank has can be wiped out
because of mark-to-market accounting principles that may be applied.
In
the past. these actions caused the very financial emergencies they
supposedly were meant to avoid. (See the Earl J. Weinreb NewsHole®
comments and @BusinessNewshole tweets.)
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