Economy has ‘blown past’ worst stress test estimates: Warren

The U.S. economy has already “blown past” the worst case scenario envisioned when the Treasury Department conducted stress tests on the viability of financial institutions, the Chairwoman of the TARP oversight panel said Tuesday.

Harvard Professor Elizabeth Warren, who chairs the panel that oversees the administration of the Troubled Asset Relief Program (TARP), said that it would mean banks may have to go through another round of recalculated stress tests.

“We’ve already blown past the worst case scenario on unemployment,” Warren said during an interview on CNBC. “That means it’s time to rerun those numbers and find out if the stress test is strong enough to give us a good prediction and tell us these financial institutions are solid even if unemployment is higher than the model predicted.”

The Treasury Department announced Tuesday that 10 banks would be allowed to repay $68 billion in bailout funds.

“I don’t care whether you’re Republican or Democrat,” Warren said. “You need good information about where the financial institutions are today and good projections on where they’re likely to be in the next couple of years.”

“Then let the politicians fight it,” she added. “I’ll go back home.”