Tuesday, May 12, 2009

More on Roubini....

With regard to the stress test being consistent with the IMF estimates, consider the following from the blog Alea:
Still, it is useful to know whether our estimates are consistent with what has been found by others. Two studies released within the last few weeks essentially bracketed the supervisory estimate. The International Monetary Fund estimated lifetime losses that would imply a loan loss rate for U.S. banking firms of about 8 percent in a stressed scenario. One of the major rating agencies estimated an annual loan loss rate of about 4-3/4 percent in a stress scenario for the next two years.  More broadly, our informal survey of the results of a considerable number of private-sector studies and analyst reports published over the past several months generally placed our projected loss rates for key portfolios near the midpoints of the ranges of these independent estimates.


Thomas Esmond Knox said...

Now 19 June.

What do you think about Paul Krugman as an expert on the banking industry

cap vandal said...

I tend to like Krugman as an economist but think he has no particular expertise in banking except as an abstract concept.

I think he and a number of economists and commentators let ideology and emotion replace reason in regard to banking.

So I suppose the answer is, not much.

Thomas Esmond Knox said...

Have any deposits been lost at an FDIC-insured bank?

cap vandal said...

No "insured" deposits have been lost.

They keep raising the insured limits, also.

There may have been some large commercial deposits that took looses at places like Indymac.

The only excuse for that is if you have certain types of loans (construction) or credit lines, you have to keep the money in that bank.

They definitely covered uninsured deposits in some cases, but probably not 100% of them.