U.S. ready to release methodology for stress tests

Investors will be looking deep into each bank's stress test results. You would not want to be holding shares in banks that fair poorly when results are released May 4th. The results will most likely begin to seep into the market prior to the official release. Stock action in the banks will foretell how each bank did as Wall Street's insider trading culture takes advantage of privaleged, non-public information.-Lou

U.S. ready to release methodology for stress tests

WASHINGTON (MarketWatch) -- As the 19 largest U.S. banks pore over the preliminary results of stress tests conducted by government officials, the Federal Reserve is expected to publicly release its methodology for conducting the reviews Friday afternoon.

Some details of the results of the stress tests, including potential losses, are expected to be made public on or around May 4.

However, the methodology to be released Friday could help investors and shareholders evaluate the financial condition of the banks. That could help divide banks into two categories -- financial institutions that will survive with little additional capital and those that will need more assistance.

Throughout the weekend and next week, banks are expected to discuss their preliminary results with regulators -- perhaps challenging some of the calculations -- before the Federal Reserve, Office of Comptroller of the Currency and other regulators provide their final conclusions.

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