Bloomberg (boldface mine):
May 7 (Bloomberg) -- Federal regulators today unveil what Treasury Secretary Timothy Geithner said will be a “reassuring” picture of a U.S. banking system able to withstand whatever stresses the recession may inflict on it once a handful of institutions add to their capital base.
The only "stress" part of the test has always been to "stress" that we will let no one fail, which means they will never be said to be insolvent. Again, the purpose of these shennanigans is to foster confidence in the system in order for the banks to be able to raise capital in the private market.
I'm guessing a bunch of the "pass" banks will be rushing to do secondary offerings soon.
