After poring over documents and asking banks about their exposure to BP over the past two weeks, the Fed found no systemic risk, and hasn't asked firms to alter their credit relationships with BP, the sources told Reuters.Everything's fine! No problems here! We're all fine!
"The Fed gave banks' exposure to BP a passing grade," said one of the sources on condition of anonymity.
Beyond's BP survival prospects, the Fed examination underscores market uncertainty about how the spill's staggering clean-up bill might affect Wall Street, a fragile economic recovery, or the multitrillion dollar energy market.
BP until recently had stellar credit ratings and generated $30 billion of cash from its oil and gas production and trading over the last year, making it a golden counterparty for many financial firms that trade in energy, including the largest Wall Street banks.
Since April, when it began trying to plug an oil spill that has spewed up to 60,000 barrels a day into the U.S. Gulf, the company has lost $100 billion in stock market value and suffered several credit downgrades.
Isn't this the sort of thing we should have Wall Street financial reform for? Just asking.
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Having bank regulators and economists be in charge of minerals management firms seems awfully shortsighted to me. Food AND Drug administration anyone? If you expand the mandate too far you risk make sure neither is covered appropriately.
The real answer, and I know you agree, is that we need a real energy bill (or at minimum an overhaul of utilities and mineral management bill) to get through the Senate this year.
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