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CNBC Stock Blog
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The so-called stress test for banks should not only prove which financial firms are stable — but should go a long way toward shoring up investor trust in financial stocks. So said Jeremy Siegel, professor of finance at Wharton School at The University of Pennsylvania.
A vital building block for market stability is numbers that can be trusted, Siegel told CNBC.
"We can't believe the CEOs" when they say their companies are strong, he said. "Last year, Bear Stearns and Lehman said, 'our books are fine, we're liquid, we're solvent' — and they weren't."
But Siegel cautioned that the stress test, useful as it may be, still contains a potential pitfall:
"Bank regulators and management cozy up to each other...and decide asset value. I'd love to see independent evaulators take part."
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