Business this week

America’s Treasury released details about the “stress tests” that are being applied under the new Capital Assistance Programme. These gauge the capacity of banks with more than $100 billion in assets to weather a downturn under an adverse scenario in which unemployment rises above 10% next year and house prices fall by 27% over two years. Financial companies will have to raise more funds from the government if needed. The state may end up owning majority stakes in some banks. See article Officials, however, played down talk of full bank nationalisation. Sheila Bair, the head of the Federal Deposit Insurance Corporation, said there was “ambiguity in the word”. The Treasury readied a third rescue plan for Citigroup. See article ... (link)