"Stress Tests" Were a Waste of Time and Money

Banking analyst Tom Brown points out that the data are now confirming that the stress tests were ridiculous from the beginning and were just another example of government cluelessness and overreach.

We’ve said it before and we’ll say it again: the stress tests were a colossal waste of time and money. The only tangible effect they had was to serve as an excuse for the government to force banks to go out and raise new capital they didn’t need, at ruinous prices.

We all heard a lot of talk not so long ago about “zombie banks.” Not anymore. Now, instead, the banking industry has become ridiculously overcapitalized. And the people who insisted the February stress test was insufficiently severe were—and are—are kidding themselves.

By the way, where is media darling Nouriel Roubini these days?