(1888PressRelease)
May 07, 2009 - “Capital Worldwide”, BofA need $10 billion needed to pass Obama’s stress test.
[“Capital Worldwide”] – US banking giant the Bank of America is looking to raise at least $10 billion in new capital as it looks to show the US government that it can pass their stress test and have enough capital to run as a bank.
Already the BofA has already had around $45 billion in cash from the US Treasury department so its keen not to take anymore. But even with this money they were still short to pass the stress test.
There are 19 U.S banks that the US government is making take the stress tests. The idea of the stress test is to make sure that the banks have enough capital to be able to lend again and survive the recession. Many of the banks have an idea whether they will pass the test or not as they were giving primarily results last week.
Since then many banks have been in negotiations with the Fed to prove that they have enough working capital to survive. Sources from BofA spoke to “Capital Worldwide” saying that they believe that by raising an extra $10 billion they will pass the test. Although it’s as though the Fed wants them to raise more, the BofA can prove to them only $10 is needed.
A Fed spokesperson would not speak to “Capital Worldwide” on this matter. Neither would the Bank of America.
“Capital Worldwide” explains that the stress test will finally make clear the state of the banking system. Real recovery can only come from understanding the real extent of this crisis. Investors are understandably a little nervous but after the results come though you will see more confidence coming back to the market.
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