Banks Need More Stress

This sounds like a job for the Scientologists: The big banks may need more stress tests. The Congressional Oversight Panel recommended Monday that the stress tests be repeated if economic conditions become worse than those that were assumed in the test's model. The Treasury Department’s model was “reasonable and conservative” according the panel, but after May’s 9.4 percent unemployment rate pushed the average for the year to 8.5 percent, some are worried that the 8.9 percent yearly average assumed in the stress tests will prove too low. Meanwhile, the Treasury Department is preparing to announce Tuesday that it will allow 10 banks, including J.P. Morgan Chase & Co., to repay TARP by buying back government shares. The move, Bloomberg writes, signals “confidence some of the largest U.S. lenders won’t again need a taxpayer rescue.”