Treasury Backtracking on Transparency – Debate On Release of Stress Test Data
According to Reuters, not only is the U.S. Treasury Dept. holding off on release of bank stress tests due to earnings season, the government department may not release institution-specific data at all. One of the many factors leading to the current financial crisis was a lack of transparency in financial markets. If these institutions are publicly traded, and if they’ve taken tax dollar funded bailouts, the data needs to be available to anyone who wishes to see it.
From Reuters:
The U.S. Treasury Department is planning to delay the release of any completed bank stress test results until after the first-quarter earnings season to avoid complicating stock market reaction, a source familiar with Treasury’s discussions said on Tuesday.
The Treasury is still talking about how results of the regulatory stress tests on the 19 largest U.S. banks will be released, and may disclose them as summary results that are not institution-specific, the source said.
The government is testing how the largest banks would fare under more adverse economic conditions than are expected in an attempt to assess the firms’ capital needs. The tests are due to be completed by the end of April, but Treasury has said they may be finished before then.
The source, speaking anonymously because the Treasury has not made a final decision on what to disclose, said officials do not want any test results released before the earnings season wraps up for most U.S. banks on April 24.
