Bank Stress Test Results to Be Released

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WASHINGTON - Awaiting results of so-called stress tests on America's financial institutions has been stressful.

The tests are at the center of President Obama's plans to restore stability to the economy. Banks need more money, but not as much as expected which is driving the stock market up.

After receiving billions of dollars in taxpayer backed bailouts, many of America's largest banks need more money to stay afloat.

"Financial markets and financial institutions remain under considerable stress," said Federal Reserve Chairman Ben Bernanke.

The stress tests were designed to gauge how the country's largest banks would weather an even more severe economic storm, in which home prices dropped another 22 percent and unemployment rose to more than ten percent.

The results were better than some expected.

Of the 19 financial giants that were put through the tests, about ten would likely need more cash under those conditions. It is number that altogether is expected to total less than $100 billion.

Results To Be Released Thursday at 5:00 PM EDT

To keep Wall Street calm, the news will be released after Thursday's closing bell. But as results of the tests leaked out this week, the markets reacted positively.

"This will be a confidence-instilling announcement," said Federal Deposit Insurance Corporation Chairwoman Shelia Bair. "There will be additional needs for capital buffers for some institutions, but I think there will be mechanisms to do that in the next six months."

Instead of preparing a Thrift Administration Review Program two package, administration officials are signaling banks need to look to the private sector for capital.

"Those institutions need to look to non-government sources first," Bair explained. "The treasury can be there as a back stop."

None of the Bank's Will Be Allowed To Fail

Officials say none of the banks will be allowed to fail. Still, investors and consumers are keeping a close eye on their health.

"Banks need capital in order to continue to make loans so the less need for additional capital," said University of North Carolina's Tony Plath.  "The better shape they're in to make new mortgages, new car loans. issue new credit cards."

As investors indicate the sense of an economic turn around, they are waiting for another important indicator due out Friday -- unemployment numbers -- the report of how many people lost jobs in April.

It is an important gauge of where the economy stands since job loss is typically the last part of a troubled economy to heal.

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CBN News
Jennifer Wishon

Jennifer Wishon

CBN News White House Correspondent

Jennifer Wishon is the White House correspondent for CBN News based in the network’s Washington, D.C. Bureau.  Before taking over the White House beat, Jennifer covered Capitol Hill and other national news, from the economy to the 2010 oil spill in the Gulf of Mexico. Follow Jennifer on Twitter @JenniferWishon and "like" her at