Though the stress tests could be dismissed as little more than political theater, even the harshest critics concede they accomplished something important: breathing room.
"The strategy of procrastination worked," said Kip Weissman, a partner at Luse Gorman Pomerenk & Schick PC. "The Obama administration was playing for time, hoping things would get better. That seems to be what is happening. Banks have a lot more options than they did 60 days ago."
But the tests may also lead to fundamental changes in the ways regulators oversee financial companies.
When the stress tests were announced in February, the outlook for the economy was dire and there was constant speculation that one, two or all of the largest banks would be nationalized.
In the three months since, such talk has died down if not quite disappeared. And this formal evaluation of the 19 largest banks hands the banks until at least November to plug any holes in their capital.
The Treasury Department and the Federal Reserve Board have put their credibility on the line by publicly revealing detailed and previously confidential data on banks.
If the test results prove overly optimistic, and it becomes clear some institutions need even more capital, it will open up comparisons to the savings and loan crisis, when policymakers took only half measures instead of dealing with the problem comprehensively.
But if the stress test results hold up and the economy does not worsen in six months, the exams may be seen as a critical turning point.
"They bought time," said Chris Low, chief economist for First Horizon National Corp.'s FTN Financial. "By the time we get to November when they are implementing these plans, I suspect the recession will be over.
"It was risky, but [Treasury Secretary Tim] Geithner made a bet that the free fall in the economy would pay off."
The government said late Thursday that 10 of the 19 banks tested need a total of $74.6 billion in additional capital. That ranges from $600 million at PNC Financial Services Groupto $13.7 billion at Wells Fargo & Co. to $33.9 billion at Bank of America Corp.
The 10 companies have until June 8 to detail their strategies and until Nov. 8 to implement them. Many said that timetable gives regulators a chance to adjust or plot new proposals if the outlook again turns worse.
"Now you have some time to see whether this approach is going to work, how bad things are going to get and whether you're going to need to come up with a way to fund [this] or more government capital," said Andy Lapierre, the managing director of International Strategy and Investment Group's policy research team. "Six months from now you have a much clearer picture on what the minimum losses are, at least."
But like all questions related to the stress tests, not everyone agrees buying time was a good thing.
"To the extent the banks are the problem and they are sitting on their hands and not making loans, time is our enemy here," said Cornelius Hurley, professor of the graduate program in banking and financial law and the Morin Center for Banking and Financial Law at the Boston University School of Law. "If what all this is about is just buying time, then we are not helping ourselves."
Indeed, the extra time may come at a high, longer-term cost. For one, regulators have taken the unprecedented step of releasing what has always been private examiner data. They could be forced to release even more data, including Camels ratings.
"It certainly shifts the paradigm of examination confidentiality. The public is likely to expect greater disclosure going forward. That is a lasting implication," said E. Wayne Rushton, a managing director at Promontory Financial Group and a former chief national bank examiner at the Office of the Comptroller of the Currency.
"This is what happens when you politicize regulatory exams," said Douglas Landy, a partner at Allen & Overy. "Bank examinations are not supposed to be used for investor information."
Regulators have also emphasized tangible common equity over regulatory Tier 1 capital. According to the stress test results, banks needed to hold at least 6% Tier 1 capital and 4% tangible common equity.
"Isn't the real story here that the regulators have disavowed Tier 1 capital as the primary test and gone to TCE?" Landy said.
He warned other banks should be concerned it will set a precedent.
"What do you do if you're bank No. 22 on the list?" Landy asked. "A regional bank with some $50 billion in assets and you have a Tier 1 capital well above 6% but you have a common ratio that's lower 2 to 3% that was always seen as fine. Are they going to be held to the same sort of buffer capital is this the new capital requirement?"
Ernie Patrikas, a partner at White & Case, said it was significant that the test was based on expected information rather than current economic conditions."Usually you go in and take a picture of a bank and write a report on the state of the bank that day," he said. "But this is forward-looking, and that's a change. I'm wondering if it will be built into the supervisory protocol."