Fed official calls for periodic stress tests of banks

03/29/2010 | Reuters · MarketWatch

Daniel Tarullo, a governor of the Federal Reserve, said regular stress tests of the largest financial institutions could be beneficial. Tarullo said evaluations conducted last year were a crucial element in the sector's ability to overcome the financial crisis and that the government's decision to disclose results was the right move. "The merits of publicly releasing firm-specific ... results were much debated within the Federal Reserve," Tarullo said. "In particular, some feared that weaker banks might be significantly harmed by the disclosures. In the end, though, market participants vindicated our decision."

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