Word: testing
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...early February, Treasury Secretary Timothy Geithner, as part of his bank fix, said he will "stress-test" the nation's largest financial firms to find out which ones are fit and which ones are flatlining, and then apply the appropriate therapy - which we assume means anything from injecting capital to pulling the plug. By using a medical term, Geithner gave the impression that he had some fiscal electrocardiograph that could be strapped to banks to chart the strength of their accounts. But when it comes to a bank checkup, the actual test is far less scientific. (Read "Geithner's Challenge...
...theory, a financial stress test looks at a firm's loans, assesses which will go bad and then concludes whether the bank will have money left when those accounts go unpaid. Pretty clear...
...reality, to run the test, you have to guess not just which borrowers will stop paying but also when. Some losses will be covered by profits elsewhere. So the firm's bottom line must be estimated. The variables leave plenty of room for the government to make some banks look better or worse, depending on the assumptions it makes. Not so cut and dried. (Read "25 People to Blame for the Financial Crisis...
...Geithner hasn't detailed his test, other than that it won't be complete for another month. Worse, officials at the Treasury say the tests probably won't be made public. That will sort out the uncertainty that has driven the stock market down...
...unrest last year, security forces arrested thousands of Tibetans on suspicion of involvement. Since then, the majority have been released, and life for Tibetans had seemed to be returning to normal. Some foreign tourists were even trickling into the region. But the coming months will provide a severe test of that relative calm. "It's hard to predict what will happen," says Rigzin. "But if they try to shove it down their throats and make Tibetans celebrate, that would not be good at all." Even if this period passes quietly, the year ahead contains many more potentially explosive anniversaries...