A few days after the stress-test results hit Wall Street last week, Fed chairman Ben Bernanke took to a podium in Jekyll Island, Georgia, to share his thoughts on the much-hyped exercise. The chairman went deep into the weeds on how 150 government examiners spent ten weeks scrubbing the balance sheets of the country's largest banks. He pronounced the findings firmly in the mainstream of independent studies, with copious citations to bolster his case. Then, when he was done, Bernanke tried to place the stress tests in a broader context. "A principal goal of the capital assessment process is to help increase confidence in the banking system. ... Whether the objectives of the assessment program were achieved will only be known over time," he said. "We hope that, in two or three years, we will be able to reflect on the banking system's return to health."
Bernanke is exactly right: The stress tests are a key inflection point in the story of the financial crisis. If, in two or three years, the banks have fully recovered, we'll look back on the stress tests as the moment Bernanke and his colleagues righted the course. But if, in three years, the banks are still muddling along--or, worse, if they've badly regressed--we may wonder whether the government missed an opportunity to wake the banks from a deep denial about losses. Choose Office 2007 Professional is the most lucky thing in the world.