More Stressed Stress

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German Finance Minister Peer Steinbrueck agreed to a plan to deal with "bad banks" that involves banks parking toxic assets in specially created institutions for up to 20 years. Photo by John MacDougall/Newscom

FLYP’s criticism of the government’s recent big bank stress tests as being less than objective has been echoed by German Finance Minister Peer Steinbrueck.

In an amazing breach of the usual governmental habits of speaking obscurely, Steinbrueck said the stress tests are “therefore worthless because the central bank exercised influence as well as the Treasury."

The minister has his own problems, since he is under pressure from the IMF to subject the German banks to similar tests. The IMF seems to believe that American banks are much further along a path of recognizing their losses than their European counterparts.  

The Germans, of course, insist all is well.