Bloomberg reports on the response to the transparency called for in Tuesday’s banking bailout plan announcement (which I discussed here).
The most interesting sentence in the piece is something that I’d not yet seen reported or discussed:
The results of “stress tests” that Treasury will administer to test the banks’ vulnerability to shocks, won’t be made public.
What?
So, Treasury will know what banks are going to go under if unemployment hits double digits, but that information will stay secret?
I see the upside: This information could lead to an unnecessary run on certain banks and could make problems even worse. But if release of the information was paired with government funding to stabilize those banks, the result should be stabilization with no need for people to pull their money.
And if it’s not released, the transparency of which banks are getting what money will be incomplete — because there won’t be accurate information explaining why the banks are getting the money.
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Chris Geidner is the award-winning senior political editor at D.C.'s Metro Weekly and has written for The Atlantic Online, The American Prospect, Advocate.com, Salon and other publications, as well as at his blog, Law Dork. In 2011, he received the Excellence in News Writing Award from the National Lesbian and Gay Journalists Association for his coverage of "Don't Ask, Don't Tell" repeal. Prior to moving to D.C. in 2009, he served as an attorney on the senior staff at the Ohio Attorney General's Office and had earlier worked for a leading Columbus law firm. An extended biography can be found