Whatever the results of the stress test are, increasing levels of tangible common equity (TCE) should be at the heart of the response. That implies painful and dilutive capital raisings to come, and not just for the banks being tested.
The Great Debate
Senator Arlen Specter’s decision to cross the aisle and join the Democratic Party hastens the extinction of moderate Republicans in the north-east and symbolizes their deep problems.
While they have avoided the opprobrium heaped on bankers during the bear market, traditional active fund managers have quietly been proving that they too are often highly paid destroyers of value.
Could Italy’s cash-strapped Fiat, Europe’s sixth auto maker, build a workable alliance with Chrysler and Opel to become be a profitable global player? Or would it be a marriage of losers, doomed to fail?