Don’t stress over the banks’ stress tests

After several months of economic turmoil, the nation’s 19 largest banks received government stress test reports on Thursday. These banks included some of the major consumer-focused outfits, such as Bank of America and Wells Fargo, as well as ones that are primarily investment banks, such as Morgan Stanley.

The stress tests results from the Federal Reserve say that 10 of the banks need to bolster their capital buffers in case the economy gets worse. 

But what do the results really mean for consumers?

On a practical level, probably not a lot, as Consumer Reports has said before. Almost all bank savings, checking, and money market accounts and certificates of deposit are insured by the Federal Deposit Insurance Corp. for up to $250,000 per depositor until the end of this year. So that cash is safe, no matter how your bank fares.

It matters more if you own stock in one of those institutions.
Under the program outline, any bank needing to boost its money reserve has until June 8 to develop a plan, and until Nov. 9 to put that plan into action. That could mean raising money from outside investors, or selling more stock.

It might also mean getting more help from the government.
Of course, as a taxpayer, you then have a bigger stake in the outcomes. And you might become more interested in some of the interesting perks bank execs have gotten, along with taxpayer help.

For more information on how you can ride out the economic storm, visit our Survival Guide for tough times.