Banks announce 'stress test' results
by Jane Fazackarley
May 07, 2009
Some of the United States biggest banks failed the 'stress tests' it was revealed today. In total, ten of them are looking for a $74.6 billion cash injection to help bolster their finances.
The aim of the 'stress tests' was to find out if the banks had enough money to tide them over if the recession continues to deepen.
The Bank of America was found to be in the most jeopardy.. They are looking for an extra $33 billion to keep them going.
Wells Fargo, GMAC, Citigroup and Morgan Stanley also find themselves needing more financing.
Banks that need more funding have been told they have up to June 8th to finish drawing up their plans. The plans will then be looked over by regulators.
Timothy Geithner has made it clear that none of the banks being tested were in danger of going insolvent. Ben Bernanke, the Federal Reserve Chairman has also backed up this opinion.
The treasury secretary says that most of them should be able to get the extra funding they need from private means. If they aren't able to do this then the banks might have to be given extra money from tax payers.
Regions Financial, SunTrust banks, Key Corp, Fifth Third Bancorp and PNC Financial Services will also be looking for extra cash.
The Bank of America say they can get the money they need by selling its assets and through other means. Citigroup,Morgan Stanley and Wells Fargo are to issue new shares.
Eric Kuby from North Star Investment Management. said: "It seems to be that the leaks were very accurate, so there doesn't seem to be any major surprises,"
"The fears of nationalisation or of failure have more or less disappeared."
The Bank of America was found to be in the most jeopardy.. They are looking for an extra $33 billion to keep them going.
Wells Fargo, GMAC, Citigroup and Morgan Stanley also find themselves needing more financing.
Banks that need more funding have been told they have up to June 8th to finish drawing up their plans. The plans will then be looked over by regulators.
Timothy Geithner has made it clear that none of the banks being tested were in danger of going insolvent. Ben Bernanke, the Federal Reserve Chairman has also backed up this opinion.
The treasury secretary says that most of them should be able to get the extra funding they need from private means. If they aren't able to do this then the banks might have to be given extra money from tax payers.
Regions Financial, SunTrust banks, Key Corp, Fifth Third Bancorp and PNC Financial Services will also be looking for extra cash.
The Bank of America say they can get the money they need by selling its assets and through other means. Citigroup,Morgan Stanley and Wells Fargo are to issue new shares.
Eric Kuby from North Star Investment Management. said: "It seems to be that the leaks were very accurate, so there doesn't seem to be any major surprises,"
"The fears of nationalisation or of failure have more or less disappeared."
Resources: http://news.bbc.co.uk/1/hi/business/8039096.stm
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