Ronald Pires

Federal Reserve Asks for Wall Street Bank Stress Tests

Per Spiegel (June 26, "The Shrinking Infuence of the US Federal Reserve"first ), the IMF is the one conducting this stress test as part of its Financial Sector Assessment Program (FSAP) of the entire US financial system (major investment banks and hedge funds included). No doubt the Fed is merely coordinating/overseein... the banks' participation in this audit. And yes, the Fed itself (for the first time) will also be required to open its own books to IMF review as a part of this.

My question is this: Is this just the IMF finally getting around to a routine audit of the US system, or is its timing a sign of low confidence in that system?