Feb
12

Reviews, ‘Stress Tests’ May Reveal Deeper Bank Troubles Article

By
– Wall Street Journal

The rigorous review the Obama administration plans to conduct across the nation’s largest banks as part of its revamped bailout could reveal a troubled network of financial institutions that have been slow to acknowledge bad loans and are struggling to build reserves.

If the condition of many banks is as weak as some analysts predict, regulators could be faced with tough decisions: Do they use federal money to help prop up flailing banks, or do they shut down some firms and limit the cost to taxpayers?

“If they are trying to dig deeper and essentially do some sort of quasi-appraisal of the underlying assets behind the loans, both on commercial and residential real estate, then they are going to see very widespread problems,” said Matthew Anderson, a partner at Foresight Analytics in Oakland, Calif., who conducts extensive reviews of troubled banks.

ARTICLE SHORTENED DUE TO LENGTH….

LINK TO ARTICLE HERE:
http://online.wsj.com/article/SB123430484537570039.html?mod=googlenews_wsj

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