If the...Fed said almost every major bank is over-leveraged there would be panic in the streets. ATMs would stop spitting cash and banks would have lines out the door.
Fort Worth (PRWEB) March 23, 2014
Fort Worth-based precious metals exchange GoldSilver.org has publicly praised the NYU-based creators of a research tool that calculates the possibility of failure by major U.S. banks. GoldSilver.org spokeswoman Maria Martin believes the model could be used as a basis for similar tests conducted by the Federal Reserve.
“The [Federal Reserve] has been conducting stress tests on banks since the crash in 2007, but the results don’t always paint a clear picture,” said Martin. “The NYU model is able to account for all sorts of things that could happen during a bank run or a recession, so it can gauge more accurately the level of risk that a particular bank has undertaken.”
According to a March 20th Forbes article the most recent round of Federal Reserve stress tests found that Zions Bank was in danger, but Bank of America, Morgan Stanley, Goldman Sachs and other met the Fed’s minimum threshold for health. The previously mentioned Bloomberg article reported that in the NYU model only Wells-Fargo was given a passing grade. Martin believes the Fed’s model was designed to be favorable to banks in order to preserve peace and stave off paranoia amongst the American people.
“If the United States Federal Reserve said almost every major bank is over-leveraged there would be panic in the streets. ATMs would stop spitting cash and banks would have lines out the door because of people wanting to withdraw their money,” Martin said. “Nevertheless, it is preferable that we know the truth even if it is scary and could possibly mean another recession or even a depression.”
GoldSilver.org is a North American market leader for gold and silver investments for home delivery or within retirement accounts. They buy and sell all sorts of investment-grade gold, silver and platinum. For more information or a free gold and silver investment guide, visit http://www.goldsilver.org or call 1-800-394-3337 today.