In another milestone in the banking industry’s recovery from the financial crisis, the Federal Reserve this week will release the results of its latest stress tests, which are expected to show broadly improved balance sheets at most institutions.
The findings would be the latest of several signs of renewed strength in the economy, including the unemployment report last Friday that showed that more than 227,000 jobs were created in February.
For the financial sector, including traditional banks and Wall Street firms that were at the heart of the panic during the crisis, the recovery has been slow but steady, with some banks recovering much faster than others.
Still, while unpleasant surprises are possible, analysts are counting on the Fed to find banks largely healthy. That would stand in marked contrast with the holes, in the tens of billions of dollars, found on balance sheetsin the first round of stress tests in 2009.
“Everybody wants to avoid headlines,” said Chris Kotowski, an analyst with Oppenheimer. “People are angry at the banks, and both the banks and the regulators just want to do something to show we’re working our way back towards normalcy. That’s what everyone is craving.”Page 1 of 6 | Next Page