Banks map different routes to capital
TEXT OF STORY
Bill Radke: The bank stress test results are official, and whether you take them seriously or not, they are having real repercussions. More than half of the 19 banks tested need to raise money — Wells Fargo, Citigroup. Tamara Keith reports on the bank that has the most fundraising to do.
Tamara Keith: Federal regulators say Bank of America needs to come up with nearly $34 billion of capital. CEO Ken Lewis appeared on CNBC this morning to talk about it:
Ken Lewis: I don’t think it matters if it’s fair or not. We’re going to do it. And we think we’ve got a clear path to do it.
That plan includes raising $17 billion of common equity — $10 billion will come from selling off its Columbia asset management unit and First Republic Bank. It might also enter into several joint ventures.
Lewis says the company also still plans to return TARP funds, though he isn’t sure how soon that will happen. American Express, which comfortably passed the stress test, has already asked to repay government funds and get out of the TARP.
The only bank that says it will probably need government money to build its capital buffer is GMAC, the auto finance giant.
In Washington, I’m Tamara Keith for Marketplace.
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