Friday, April 24, 2009

T - 30 Minutes to Stress Test: Above or Below 3% Tangible Common Equity?

Ahead of the announcement in 30 or so minutes, Option Armageddon (via Naked Capitalism) with details of the stress test. Reuters reports:

"U.S. regulators want the top 19 banks being stress-tested to have at least 3% [TCE]."
Below is a chart put together with data from Option Armageddon.


We see a number of banks that would need to convert preferreds to common or hit up the markets (private or government aided) if these figures are correct.

Update:
the actual release? Not much. As Paul from Infectious Greed details:
Lots of Testing, Not Much Stress