REUTERS INSTANT VIEW 1-Biggest U.S. banks need $74.6 bln in capital
NEW YORK, May 7 (Reuters) - U.S. regulators told top banks
on Thursday to raise $74.6 billion to build a capital cushion
officials hope will restore faith in financial firms and set a
course out of the deepest recession in decades.
Story: [nTRU000380]
KEY POINTS:
* The results of bank "stress tests" -- which involved more
than 150 regulatory officials poring over the books of the 19
largest firms -- effectively drew a line between healthy and
weak, and quantified exactly how much those institutions
struggling under the weight of souring loans must raise.
* The bank reviews, led by the Federal Reserve, showed 10 banks
needed additional capital to withstand heavier losses that
would likely come if the recession worsened.
* Bank of America Inc <BAC.N> had the largest need at $33.9
billion, while Citigroup Inc <C.N> needed $5.5 billion.
COMMENTS:
MATT MCCORMICK, PORTFOLIO MANAGER, BAHL & GAYNOR INVESTMENT
COUNSEL, INC., CINCINNATI, OHIO:
"It seems a classic case of buy on the rumor and sell on
the news today. The main thing that I'm looking at here is, the
line about reviewing leadership. I think there's going to be
some changes at the top for these companies, as we saw with
GM.
"Where my concern is, is that the government is again
micromanaging these banks. A lot of these guys are improving.
The issue here comes down to control: Will they allow some
banks to remove themselves from TARP? Will they let the true
winners come out and play?"