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...to roost.Another addition to the "What goes around, comes around" file [under the "Let's de-escalate" sub-folder]:
...Chief Executive Officer Kenneth D. Lewis declined to discuss the stress tests at Bank of America’s annual meeting last week, citing the Fed’s instructions to banks. He said April 20, responding to an analyst’s question, that the company doesn’t expect to require additional capital...
Bank of Countrywide May Need About $34 Billion of Capital
May 6 (Bloomberg) -- Regulators have determined that Bank of America Corp. requires about $34 billion in new capital, the largest need among the 19 biggest U.S. banks subjected to stress tests, said a person with knowledge of the matter.
Bank of America fell 9 percent in trading before U.S. exchanges opened.
Citigroup Inc.’s shortfall is more limited because the company already plans to convert government preferred shares to common stock, people familiar with the results said. JPMorgan Chase & Co. doesn’t need a deeper reserve against losses, according to people familiar with that company’s result.
The banks may outline their strategies to add capital, or in other cases buy out government stakes, after the Federal Reserve publishes the stress tests results tomorrow.
Companies requiring more capital could raise all the funds through conversions of preferred shares if they choose, the people said.
“To the extent that there are banks that need capital, our hope is that many of them will be able to raise that capital through either private equity offers, or through conversions and exchanges of existing liabilities,” Fed Chairman Ben S. Bernanke told lawmakers at a hearing in Washington yesterday. “The data we have are accurate reflections of the financial conditions of those banks.”...
...“It’s obviously not our intention or desire to have long- term government ownership of banks,” Bernanke said at the congressional Joint Economic Committee. Still, he added that it would likely be a “few years” before banks can end their dependence on government capital.
May 6 (Bloomberg) -- Regulators have determined that Bank of America Corp. requires about $34 billion in new capital, the largest need among the 19 biggest U.S. banks subjected to stress tests, said a person with knowledge of the matter.
Bank of America fell 9 percent in trading before U.S. exchanges opened.
Citigroup Inc.’s shortfall is more limited because the company already plans to convert government preferred shares to common stock, people familiar with the results said. JPMorgan Chase & Co. doesn’t need a deeper reserve against losses, according to people familiar with that company’s result.
The banks may outline their strategies to add capital, or in other cases buy out government stakes, after the Federal Reserve publishes the stress tests results tomorrow.
Companies requiring more capital could raise all the funds through conversions of preferred shares if they choose, the people said.
“To the extent that there are banks that need capital, our hope is that many of them will be able to raise that capital through either private equity offers, or through conversions and exchanges of existing liabilities,” Fed Chairman Ben S. Bernanke told lawmakers at a hearing in Washington yesterday. “The data we have are accurate reflections of the financial conditions of those banks.”...
...“It’s obviously not our intention or desire to have long- term government ownership of banks,” Bernanke said at the congressional Joint Economic Committee. Still, he added that it would likely be a “few years” before banks can end their dependence on government capital.
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