Rather than estimate the economic value of banks’ assets – what the assets would fetch in a well-functioning market – and the extent to which they exceed liabilities, the stress tests merely sought to verify that the banks’ accounting losses over the next two years will not exhaust their capital as recorded in their books. As long as banks are permitted to operate this way, the banks’ supervisors are betting on the banks’ ability to earn their way out of their current problems – even if the value of their assets doesn’t now significantly exceed their liabilities.