UK Monkey See, UK Monkey Do

"In a bid to shore up confidence in the UK banking system, the Financial Services Authority disclosed details of how it expects banks to test that they hold enough capital. ... The FSA said it has 'greatly increased' its use of stress tests over the past eight months as part of an effort to ensure banks can absorb losses during a severe economic downturn. The regulator said it won't, however, publish the results of its stress tetsts. ... Some observers said the announcement should help reassure investors and lenders that UK banks are sound, especially as the tests are viewed by some as stricter than those conducted in the US. 'The additional detail on stress tests provided by the FSA, using tougher parameters than those revealed in the US, should help to build confidence in the banking sector,' said Marcus Sephton, head of regulatory services at KPMG in the UK", Adama Bradbery and Laurence Norman at the WSJ, 29 May 2009.

If the FSA's stress tests mean anything, the FSA could have helped us in the US. How? By calling the Fed's tests inadequate. Sure. And KPMG UK will say that too. Given KPMG US audits Citigroup. Sure. These tests, not to be disclosed will be another sham.