May 5, 2009 8:44 AM
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Report: 10 Banks May Need Extra Cash
4965813Government stress tests for the banking industry aren't supposed to be made public until Thursday, but that hasn't stopped a steady stream of reported results from flowing in.
The Federal Reserve plans to release those results to bank executives Tuesday and they may show about 10 of the 19 largest banks in the country need additional capital to withstand a hypothetically worsening recession, according to a Bloomberg report.
Recent reports indicate that Citigroup, Bank of America and Wells Fargo are among the companies that will need some extra cash. Among the options to raise capital are selling assets, raising funds from private investors or converting preferred shares into common stock.
More taxpayer dollars is another possibility, but both the government and the banks appear reluctant to pursue that option. Banks don't want to be subject to further federal restrictions and scrutiny, especially in the realm of executive pay.
For the government's part, White House Press Secretary Robert Gibbs indicated Monday that "the administration doesn't believe we need to go to Congress right now" to request more money.
The Federal Reserve plans to release those results to bank executives Tuesday and they may show about 10 of the 19 largest banks in the country need additional capital to withstand a hypothetically worsening recession, according to a Bloomberg report.
Recent reports indicate that Citigroup, Bank of America and Wells Fargo are among the companies that will need some extra cash. Among the options to raise capital are selling assets, raising funds from private investors or converting preferred shares into common stock.
More taxpayer dollars is another possibility, but both the government and the banks appear reluctant to pursue that option. Banks don't want to be subject to further federal restrictions and scrutiny, especially in the realm of executive pay.
For the government's part, White House Press Secretary Robert Gibbs indicated Monday that "the administration doesn't believe we need to go to Congress right now" to request more money.
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