Citi May Need Extra $10B to Pass Stress Test

Fed delays release of results as banks haggle over initial findings
By Rob Quinn,  Newser Staff
Posted May 2, 2009 4:46 AM CDT
Citigroup may be as much as $10 billion short of enough capital to meet the Fed's financial health requirements.   (AP Photo/Mary Altaffer, file)
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(Newser) – Citigroup may have to scrape together as much as $10 billion in fresh capital to pass the Fed's stress tests for big banks, insiders tell the Wall Street Journal. The release of the tests—which assess how a bank could weather various dire scenarios—has been pushed back from Monday to Thursday as Citi and others haggle with the Fed over its early findings.

Sources say Citi could end up passing the test with $500 million to spare if the Fed gives it credit for an impending partial sell-off. The administration has said it won't allow any of the 19 tested banks to collapse, but those who fail to raise enough money from private investors may have to give up more equity to the government in return for aid.