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You very much thanks and the Federal Reserve is releasing the first rounds of its latest bank stress test results in just two hours.
Joining us now with his outlook on the tests than what they mean big banks.
Former Minnesota governor Tim Pawlenty CEO and president of the financial services roundtable.
Governor thank you -- taking -- -- have you with us so we're gonna get these tests in two parts now.
Part one today is basically can they survive an economic downturn.
Part to begin a week determines whether or not they can issue a dividend and the buybacks.
So -- important test -- is an.
What is important test and while we don't know the results -- the -- true we can maybe surmise that given the increasing strength.
And health of these banks but that we've seen from other measurements that the results perhaps will be Drexler more positive than some expected or perhaps in the past.
And they you made a good distinction is well Tracy between the stress test today which will be announced.
And then the approval or not of the bank's capital distribution plans which are announced next week the two are related or connected but two different things really.
And it's important to keep them in that frame.
There's a there's a lot of criticism now that really you can set the parameters for these tests anyway you want to have people passed them.
Last time of the nineteen banks -- failed.
Citi -- ally in that light what do you expecting to hear this -- -- expecting everyone to kind of passing emblem and this system be happy again.
Well keep in mind sometimes people confuse the failure of the stress tests with the capital plans or distribution plans being rejected so.
For example last time I believe there's at least one institution may be more and actually pass the stress test per say.
But had their capital distribution plan rejected and they were -- by the media to having failed the stress tests so.
Again you know keeping those two things.
Somewhat separate -- and you anticipate better results this time because banks have all time high according the FDIC.
Equity levels and capital levels.
There's been significant improvements in the health and stress of the banks as measured by other third parties so I -- I hope and believe the results will be -- any positive.
-- like Citi and Bank of America could really use a positive result write these stocks are arguably undervalued.
It could be -- to the races again for the financial sector as a whole which.
Many argue how goes the financials goes the rest of the market -- -- we can put this recession thought behind us.
Well would be a nice development of course -- the industry's been through a great deal of to -- over the last you know three to five years and obviously there's been a lot of the a lot of bad decisions and judgments leading up to that.
But it'll be good for the economy and good for the country if we have.
And and healthy financial institutions including these banks and by the way they -- are rearing their reputation by rearing trust you don't just get it by talking about you gotta go -- -- and and I think we'll see that in the coming months and years.
-- CEO this roundtable what else would you like to see out of the financial services sector going forward.
Well just an appreciation I always like to jokingly say to people you know if you don't need it a checkbook or savings account.
Or loan or a mortgage or -- small business.
Capitalization program more life insurance or car insurance or an annuity are -- 01 K or the like then -- -- our industry isn't very important but if you need any one of those things and by the way every American needs one of them almost every day Italy.
Important industry it's important industry want to be healthy we want to be trusted in our goal to get -- back on track I think it is.
Governor Pawlenty we certainly need the big banks thank you certain.
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