Federal Reserve Chief Ben Bernanke on Monday said that the recently completed stress tests are not all that banks should do to keep track of their risks.
“The assessment program did not address some risks that institutions still need to consider in their own internal stress tests, such as operational, liquidity, and reputational risks,” Bernanke said in a speech today at a financial markets conference in Jekyll Island, Georgia, according to a prepared statement.
Bernanke said that all 19 firms which took the tests, and especially those with “trading and investment banking” businesses should look at those aspects.
“Those risks are important and will need to be monitored by both the firms and the supervisors,” he said.
Bernanke said that a key objective of the stress tests was to increase confidence in the banking system, but it could be “some time” before that can be evaluated.
He said he was encouraged that various banks have already announced that they will seek the capital they need to raise by the November 9 deadline, with some already announcing plans or new equity issues. “In another positive sign,” he said, some have already announced plans to issue long-term debt not guaranteed by the Federal Deposit Insurance Corporation.