When the stress test plan emerged in February as a kind of souped-up version of regular regulatory bank examinations, senior administration officials said the government did not plan to release the results.
They said, however, the public was likely to learn indirectly which banks did well as the institutions either tried to raise funds or reported that they needed no additional capital. Any new infusions of bailout money -- the banks can request government funds immediately -- also would be disclosed.
The topic of the stress tests came up during a meeting at the White House late last month between President Obama and 15 top executives from the nation's largest banks, all recipients of bailout money, according to bank executives who were knowledgeable about the meeting but not authorized to discuss it publicly.
The bankers told Obama that the initial information released about the test had been too limited, and that they urged the president to "put an end to the issue" by announcing the results in a "clear, transparent and definitive way," according to one of those people.
The Federal Reserve has told the banks not to reveal the results of the tests, just as they are barred from disclosing the results of regulatory exams, said another bank executive.
The ban on disclosing regulatory findings is designed to prevent deposit runs at institutions that appear weak, something that analysts warn the government is risking in conducting the stress tests.
The Securities and Exchange Commission requires public companies to publicly report any "material corporate event." Banks and regulators are trying to figure out whether the stress tests are simply bank exams or something more, said Scott Talbott, chief lobbyist for the Financial Services Roundtable, which represents large financial institutions.
"It's going to be a challenge," he said of the administration's decision about how much information to release. "My advice would be to take a look at the total results and weigh the balance between transparency and protecting the system."
In a report on the tests last week titled "Total Confusion," analyst Richard X. Bove of Rochdale Securities contended that the government had backed itself into a corner because there was "no effective way to communicate the results of this test without causing greater stress than the test itself."
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jim.puzzanghera@latimes.com
scott.reckard@latimes.com
