Morning Brief: Stress relief
Top Story After concluding their “stress tests” of the health of the nations banks, U.S. regulators yesterday ordered 10 of them to raise $75 million in equity as a buffer in case of further economic downturn. In a worst case scenario, the Fed predicted that losses at the country’s 19 largest banks could reach $599 ...
After concluding their “stress tests” of the health of the nations banks, U.S. regulators yesterday ordered 10 of them to raise $75 million in equity as a buffer in case of further economic downturn. In a worst case scenario, the Fed predicted that losses at the country’s 19 largest banks could reach $599 billion in 2010.
The test results were less dire than many analysts had feared, leading to some optimism that the worst is over for the U.S. banking sector. The stock market rose with the news.
But while the tests may have stopped the bleeding, the rigor of the Fed’s confidence-boosting measure has been questioned and many continue to wonder what will happen if the Fed’s worst case scenario proves hopelessly optimistic.
- Local residents say that 147 people were killed in U.S. airstrikes in Afghanistan’s Farah Province earlier this week. The U.S. military has admitted it caused at least some of the deaths.
- Pakistan’s humanitarian crisis continues to worsen as nearly half a million people have fled the fighting in Pakistan’s Swat Valley.
- China’s vice premier said he saw the financial crisis spreading and the world economy worsening before it gets better.
- Georgian government officials have agreed to meet opposition leaders after month-long demonstrations in Tblisi turned violent.
- A right-wing Croatian MP was sentenced to 10 years in prison for war crimes.
- The EU is holding a summit in Prague with Middle Eastern and Central Asian countries to restart work on the stalled Nabucco pipeline project.
- The Pope left for his first trip to the Middle East, with planned stops in Jordan, Israel and the West Bank.
- Israel’s government is debating withdrawal from a disputed village on the Lebanese border.
- The former head of Iran’s revolutionary guards has registered as a presidential candidate.
- At least 12 were killed in fighting between Shabaab rebels and pro-government militias in Somalia.
- Sudan’s government says it will open the country up to more international aid groups.
- Preparations are under way in South Africa for Jacob Zuma’s inauguration tomorrow.
- Over 50,000 people have been left homeless by flooding in Brazil.
- Venezuela’s Hugo Chavez announced plans to further nationalize the country’s oil industry.
- The handling of the flu crisis has emerged as an issue in Mexico’s election season.
Justin Sullivan/Getty Images
Joshua Keating was an associate editor at Foreign Policy. Twitter: @joshuakeating
More from Foreign Policy
A New Multilateralism
How the United States can rejuvenate the global institutions it created.
America Prepares for a Pacific War With China It Doesn’t Want
Embedded with U.S. forces in the Pacific, I saw the dilemmas of deterrence firsthand.
The Endless Frustration of Chinese Diplomacy
Beijing’s representatives are always scared they could be the next to vanish.
The End of America’s Middle East
The region’s four major countries have all forfeited Washington’s trust.