The Bank 'Stress Tests' Were Neither Stressful Nor Tests

So, call me crazy, but I thought after the Enron and Arthur Andersen meltdowns, the government had gotten out of the business of bending over backwards to help companies cook their books. In fact, yes after reading this Politico piece by the generally solid Eamon Javers, it seems I am crazy.


The article goes over 5 different ways the Obama administration turned the much-vaunted "stress tests" into government seals-of-approval for all sorts of accounting shenanigans. Here's an example:

December was probably an awful month for Goldman Sachs. What to do? Make it go away. The investment house changed its fiscal calendar, so that the year ended in December, rather than in November in the past. That had the effect of eliminating December's results from public disclosures...

Firms took advantage of new accounting rules that can make the same business results look better on the bottom line - like the way Citigroup added an additional $2.7 billion on the bottom line simply by tweaking the math for the first quarter.

It worked. Traders started buying bank stocks again, and the White House didn't make a peep of complaint.

What's amazing is that the media and the administration even called these "stress tests" tests at all, considering "The government announced early on in the process that every single bank would "pass" the stress tests."

#story_page_ below_article

Understand the importance of honest news ?

So do we.

The past year has been the most arduous of our lives. The Covid-19 pandemic continues to be catastrophic not only to our health - mental and physical - but also to the stability of millions of people. For all of us independent news organizations, it’s no exception.

We’ve covered everything thrown at us this past year and will continue to do so with your support. We’ve always understood the importance of calling out corruption, regardless of political affiliation.

We need your support in this difficult time. Every reader contribution, no matter the amount, makes a difference in allowing our newsroom to bring you the stories that matter, at a time when being informed is more important than ever. Invest with us.

Make a one-time contribution to Alternet All Access, or click here to become a subscriber. Thank you.

Click to donate by check.

DonateDonate by credit card
Donate by Paypal

Don't Sit on the Sidelines of History. Join Alternet All Access and Go Ad-Free. Support Honest Journalism.