Stress Tests Might Be Pointless, Treasury Declines to Comment on Off-Book-Assets

By  Danielle Ivory on Apr 03, 2009

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This report was produced in collaboration with Alternet.

At the center of President Obama's overhaul strategy for Wall Street are the "stress tests" which will be applied to all financial institutions. But how accurate will the test results be? That will depend on whether the treasury takes off-balance-sheet assets into account, experts say.
Back in February, in the House Financial Service Committee, when asked a question about the value of Citigroup's assets, CEO Vikram Pandit provided a less-than-clear response: "It's an extraordinarily difficult question."

Rob Weissman, director of the corporate watchdog group, Essential Action, and author of a new report called Sold Out: How Wall Street and Washington Betrayed America, said that, in addition to what Pandit said, there's an additional factor that could fog the test results: off-the-book assets.

The Treasury declined to comment on whether they would be taken into account.

Click to read the whole story on Alternet.