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cloud Bloomberg. what's happening. The huge story of the day, certainly in the United Kingdom and for much of Europe,

but in the US today, everybody's talking about the banks, the second round of Fed stress tests out yesterday,

and it's a little bit like Lake Wobegon where all the men are pretty

and all the women are strong and the children above average. Everybody passed in the US this time.

A couple of foreign banks didn't quite get there.

We're going to talk about that now with Brad Hints

because of course he is the man the CEO the I'm sorry

Stern Business School Finance Professor not the CEO of Stern Business School

of course but the former CFO what I meant to say of several banks and a long-time bank analysts he joins us now and Brad

Yeah, obviously the bank's got to be happy, but the Fed has to be happy too because they did set a rather tough bar

a rather high bar in the adverse stress scenario and basically everybody cleared it in terms of capital adequacy.

Well that's exactly right.

So if we think of the stress test, the stress test is a Swiss Army knife that the Fed uses, right?

And one of the uses of the Swiss Army knife is public relations so in the midst of Brexit the fed is able to say

US banks are solid and that help works well with the press and it works well with the public and it works well on Capitol Hill.

And, you know, and yes, they also they stress the banks and they did well.

The banks have been getting much better at taking this test and part of that is they reversed engineered a lot of the

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