Shelby: Keep stress tests secret

Sen. Richard Shelby (R-Ala.), the top ranking Republican on the Senate Banking Committee, thinks the government should keep the results of bank “stress tests” under wraps.

The tests are intended to reveal which banks need more capital. Preliminary results, leaked to the Wall Street Journal, indicate that 10 of the top 19 banks will need more capital. Full results will be made public on Thursday.

“What’s interesting, and perhaps disturbing to a lot of people, that they publicized all these stress tests for the 19 top banks,” Shelby said on MSNBC’s Morning Joe. “And now there’s a lot of expectations, either up or down, coming out of this.”

Shelby added the banks ran their own stress tests “all the time,” but said the results had never been advertised.

“I think it’s a bad thing to publicize them like that,” Shelby said, “but since they’ve done it, perhaps there’s some upside to it. Some banks are going to emerge stronger, that means more investor participation, growth perhaps, and confidence.”

Shelby opposes more government bailout funds for banks, but expects the Obama administration to intervene anyway. The only question, he said, is how the administration will deal with struggling banks.

“Will they prop them up and keep the dead walking, or will they merge them?” Shelby asked.