Monday, May 4, 2009

Aprox. 10 Banks Will Need to Raise Capital

Following the release of stress test results, approximately 10 banks will need to raise capital, according to WSJ.

"There undoubtedly will be banks that need more capital," White House spokesman Robert Gibbs said Monday in a news briefing. He said he didn't believe the Obama administration would need to ask Congress for more money. "I think everyone involved will be looking for banks to raise this through either private means or the selling of some assets that they have or that they control."

And if they can't raise money that way, there is always the nationalization option. WSJ again:

Officials say banks that can't tap private markets will be able to raise capital
by agreeing to convert some of the government's existing preferred shares into
common equity, a move that would leave the government owning chunks of the
nation's largest banks.

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