Bank of America plans to raise $10 billion in capital: report
May 3, 2009 8:48 PM ET
Thomson Reuters Business News – MSN MoneyNEW YORK (Reuters) – Bank of America Corp is working on plans to raise more than $10 billion in fresh capital, even as it and Citigroup Inc launch last-ditch attempts to convince the U.S. government they do not need to bolster their balance sheets, the Financial Times reported.
Citing people close to the situation, the paper said that Citi, Bank of America and at least two other lenders will on Monday attempt to convince the U.S. Treasury and Federal Reserve that the findings of “stress tests” into their financial health were too pessimistic.
Bank of America, which has had $45 billion in government aid, was found to need well in excess of $10 billion, the Financial Times reported on its website on Sunday, citing sources.
Regional lenders Wells Fargo and PNC Financial were also among the banks that would need to raise more capital unless they could persuade the authorities their findings were wrong, the paper reported, citing people close to the situation.
Citi May Need Up to $10 Billion – FOXNews.com
The bank, like many others, is negotiating with the Federal Reserve and may need less if regulators accept the bank’s arguments about its financial healthWall Street Journal / FOXNews.com
Sunday, May 03, 2009
WASHINGTON — Citigroup Inc. may need to raise as much as $10 billion in new capital, according to people familiar with the matter, as the government continues negotiations with banks over the results of its so-called stress tests.The tests will predict each bank’s potential losses in certain asset categories under dire economic scenarios. The government is expected to direct several banks, including Bank of America Corp., to bolster their capital by raising new funds or converting existing securities into common stock.
The government’s strong preference is for banks in need of fresh capital to raise it either through private investors or selling assets, officials say. That won’t be an option for certain weaker banks, who may have to give the government big stakes in their common equity to boost capital levels. Such a move would help fill banks’ capital needs but would also raise thorny questions about how large a role the U.S. might play in their daily operations.
The Obama administration is expected soon to outline what type of investor it will be in companies where it has a stake, according to people familiar with the matter. The Treasury is discussing applying different levels of governance depending on the size of the U.S. government’s stake. The overall goal is to get out of the investments as quickly as is possible and minimize government intervention in banks’ operations.
Citi May Need Up to $10 Billion – Presidential Politics | Political News – FOXNews.com.
Fresh New Blood… Bring me your Gold and I will give you these Nice Credits on our Ledgers and as a bonus we will take care of the “stressful” details … joe
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