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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.

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