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Wells Fargo, 9 Others Expected to Fail Stress Test
By Neal Colgrass
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Posted May 4, 09 8:51 PM CDT
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(Newser)
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The Obama administration is expected to tell 10 of 19 banks receiving "stress tests" to raise more capital as a buffer against possible dark days ahead, the Wall Street Journal reports. Down from a recent estimate that 14 banks needed more money, the list may include Wells Fargo, Bank of America, and Citigroup. Officials plan to start breaking the news to banks tomorrow and release official results Thursday.
Officials say banks can hit up private investors for capital instead of tapping the Troubled Asset Relief Program, which still holds $109.6 billion. Banks that can't raise money could turn government preferred shares into common equity, giving Washington greater bank ownership. Despite reports of the stress test results, optimism carried Wells Fargo, BofA, and CitiGroup stocks higher today.