Opinion: Insolvent banks should feel market discipline

View an online version of this email here.  All times are London time: Wednesday May 06 2009 Breaking news Opinion: Insolvent banks should feel market discipline The results of government stress tests on the 19 largest US banks are due to be announced on Thursday, measuring how viable they are under adverse economic conditions. While all the banks appear to have passed the tests, reports suggest as many as 10 need to raise additional capital, write Matthew Richardson and Nouriel Roubini. Once again, the question will be how the near-insolvent banks can be kept afloat, to avoid systemic risk. But the question we really should be asking is: Why keep insolvent banks afloat? We believe there is no convincing answer; we should instead find ways to manage the systemic risk of bank failures. Read more » ABOUT THIS EMAIL You have received this email because you have signed up for this briefing on FT.com Manage subscriptions | Unsubscribe | Change your email address Change whether you receive this email as HTML or plain text | Forward this email to a friend Privacy policy | Advertise | Contact © Copyright The Financial Times Ltd 2009. "FT" and "Financial Times" are trademarks of the Financial Times. The Financial Times Limited, registered in England and Wales number 227590. Registered office: Number One Southwark Bridge, London SE1 9HL. VAT number GB 278 5371 21.