Banking could be at historic turning point with successful stress tests
Alex Pollock, a scholar at the right-of-center R Street Institute who has studied financial cycles, cautioned that the U.S. will soon be overdue for a financial crisis and not to put too much faith into the stress test results. “If you believe stress tests can work, then you have to believe that regulators and central bankers really know what’s going on and what really is risky and what the future might bring. And nothing in financial history, especially the history of their pronouncements before the last crisis, gives you any faith that that can be,” Pollock said. “Nobody, including central bankers and regulators, knows what’s’ going to happen.”
