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Regulators in the United States revealed overnight that US$75 billion ($A99 billion) in additional capital will be needed to steer the country’s banks out of the current crisis.
According to the results of the government’s bank ‘stress tests’, 10 of the country’s 19 largest banks, including Bank of America, Citigroup and Wells Fargo, will need to bolster their reserves in order to withstand heavier losses should the recession worsen, The Australian reported today.
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Bank of America will need to raise $US34 billion (A$45 billion) in capital, more than any of its peers.
“These examinations were not tests of solvency... rather, the assessment program was a forward-looking, "what-if" exercise intended to help supervisors gauge the extent of the additional capital buffer necessary to keep these institutions strongly capitalised and lending,” commented US Federal Reserve chairman Ben Bernanke.
“The current crisis has been one of the most challenging financial and economic episodes in modern history, but we face no problems that cannot be overcome with insight, patience, and persistence. The Federal Reserve... will certainly do its part in our common effort to restore stability and prosperity.”
