Bernanke lauds 2009 stress tests

WASHINGTON, May 6 (UPI) -- U.S. Federal Reserve Chairman Ben Bernanke lauded the bank stress tests the government conducted a month ago on the nation's 19 largest banks.

In a speech in Chicago at the 46th Annual Conference on Bank Structure and Competition, Bernanke said the "unprecedented" tests that reviewed two-thirds of the country's bank assets using a grouping of the largest banks restored confidence in the banking system

The tests were conducted a year ago, seven months after the collapse of Lehman Brothers, giving the public a focused look at the health of the 19 banks, which including Bank of America, Citigroup, Wells Fargo & Co., Goldman Sachs and others.

"Nearly all of the … (tested) firms that were judged to need additional capital were able to raise that capital in the public markets … and most of the 19 institutions have repaid the government capital that had been injected during the crisis," he said.

Logistics, he said, prevented the Fed from conducting "full-scale simultaneous stress test" of the rest of the nation's banks.

Bernanke pushed for regulatory reform, but he did not single out any specifics, except to say, "We need a strong resolution framework that allows policymakers to wind down failing, systemically important financial institutions without a destabilizing bankruptcy and without a taxpayer bailout."