The leaks were right on
The bank stress test results are in. Citi needs $5.5 billion, Bank of America, $34 billion, Wells Fargo $15 billion -- the same numbers reported earlier this week. Huh. I wonder where the leaks came from?
All totaled, 10 of the 19 banks need $74 billion. The rest, including JP Morgan and Goldman Sachs, don't need any capital, according to the parameters of the test, which still deserve skepticism. You can read more on the results here and the entire report here.
Here's part of Fed Chairman Ben Bernanke's statement. The emphasis in the last sentence is mine:
The results released today should provide considerable comfort to investors and the public. The examiners found that nearly all the banks that were evaluated have enough Tier 1 capital to absorb the higher losses envisioned under the hypothetical adverse scenario. Roughly half the firms, though, need to enhance their capital structure to put greater emphasis on common equity, which provides institutions the best protection during periods of stress.
Many of the institutions have already taken actions to bolster their capital buffers and are well-positioned to raise capital from private sources over the next six months. However, our government, through the Treasury Department, stands ready to provide whatever additional capital may be necessary to ensure that our banking system is able to navigate a challenging economic downturn.
Are you kidding me? That doesn't provide "considerable comfort" to this taxpayer. On the contrary, it makes me considerably uncomfortable.