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Goldman Sachs (GS) and Morgan Stanley (MS) should be prevented from returning capital to...

Goldman Sachs (GS) and Morgan Stanley (MS) should be prevented from returning capital to shareholders, says Sheila Bair, as any distribution would bring their leverage to greater than 25:1. "This underscores (a) weakness of the tests: They didn't really stress liquidity," says Bair noting the IBs - without deposit bases - are especially vulnerable.
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Comments (2)
  • Josh Krause
    , contributor
    Comments (1361) | Send Message
     
    Why stress liquidity when it understodd that Bernanke will supply infinite liquidity on demand.

     

    There is no downside to banks levering back up, at least for the banks. The Fed has agreed to provide infinite support for the banks, regardless of the moral hazard.
    16 Mar 2012, 08:40 AM Reply Like
  • Director one
    , contributor
    Comments (62) | Send Message
     
    Thanks Shelia for an honest appraisal and analysis of the situation.......who could figure out its phony gov't testing but a former insider.........
    16 Mar 2012, 08:55 AM Reply Like
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