The full results of the government’s banking “stress tests” will be released today, but preliminary results now available show that BofA is one of the weaker big banks in the nation. The weakest, Citigroup, needs to raise $5 billion in new capital in addition to taking “additional steps to strengthen its reserves,” according to Washington Post accounts.
Bank of America isn’t far behind in the Crippled Big Dog Sweepstakes, needing to come up with $34 billion to strengthen its reserves. The Charlotte banking behemoth has several ways available to acquire that much capital, none of which requires more government bailout money. One thing the tests have made clear is that the entire banking industry is still a threat to the overall economy. Kind of makes you wonder why these guys still walk around with a swagger, doesn’t it?
This article appears in May 5-12, 2009.
