Tag: SCAP

Profitability

“We’ve already blown past the worst-case scenario on unemployment” | repeat stress tests

Colin Henderson

As banks rush to repay TARP money, driven by the desire to remove government control rather than any reflection of improved financial standing, here is a sobering statement from Elizabeth Warren.  Just as GM didn’t ‘get it’ in terms of the world will look like on the other side of this recession, many banks appear to have similar blinders.  Instead of arguing that they are not in bad shape and that they are secure, why not make changes now that display the recognition that the future is not going to be anything like the past.  I say again, and blame … Continue reading “We’ve already blown past the worst-case scenario on unemployment” | repeat stress tests

Uncategorized

As predicted the consequence of government ownership is significant

Colin Henderson

A US regulator on Friday predicted that chief executives and directors of some of the banks that underwent the stress tests could lose their jobs, Regulator expects bank chiefs to lose jobs | FT By Francesco Guerrera and Nicole Bullock in New York Published: May 16 2009 00:10 | Last updated: May 16 2009 A US regulator on Friday predicted that chief executives and directors of some of the banks that underwent the stress tests could lose their jobs, in another sign of the government’s desire to have a say in the running of bailed-out companies. Sheila Bair, chairman of … Continue reading As predicted the consequence of government ownership is significant

Uncategorized

Bank of America Needs $33.9 Billion | NYT

Colin Henderson

As predicted yesterday, the amount of capital the banks need is far in excess of the amounts they were negotiating. This news just in from the NYT confirms what had to be the case.  If we do the math based on project bad debts, it had to be in the $20bn + range for the big banks.  Similar results will apply to Wells, Citi,  PNC and others in the group of 19.  Watch out for the stock market tomorrow.  Reality bites. Bank of America Needs $33.9 Billion, U.S. Determines The government has determined that Bank of America will need $33.9 … Continue reading Bank of America Needs $33.9 Billion | NYT

Business Models, Innovation1 Comment

Where are the bank visionaries when we need them?

Colin Henderson

As we watch for bank stress test results in the US and other countries efforts to deal with Banks’ asset valuation and capital levels, its useful to keep a track on the economic back drop, and assess the bank’s efforts to address their real problem, which is over-valued assets. The US stress tests specifically address the impact on banks under certain sets of future assumptions for economic growth and stability. Spring forecasts 2009-2010 | European commission The Commission forecasts a sharp contraction of the EU economy by 4% in 2009 (relative to a positive growth of 0.8% in 2008). Almost … Continue reading Where are the bank visionaries when we need them?