Stress Test Results Trickle Out Options

[Snuffysmith]

Stress Test Results Trickle Out "The government has told Bank of America it needs $33.9 billion in capital to withstand any worsening of the economic downturn [1], according to an executive at the bank. If the bank is unable to raise the capital cushion by selling assets or stock, it would have to rely on the government, which has provided $45 billion in capital through the Troubled Asset Relief Program ...: NYT; "The main purpose of the stress tests remains largely unfulfilled. Federal officials want banks to raise more capital, from the government if necessary, so that they will have the financial strength to increase lending and help lift the economy from recession. The success of that process, which begins tomorrow and could take six months, ultimately will depend in large part on whether investors believe the government's assertion that many banks are healthy and deserving candidates for new investment ...": W. Post; "The public relations campaign packaging the bank stress tests is kicking into high gear and our professional information managers are really hitting their stride ... deliberately or inadvertently confusing people is made much easier by the fact that the experts are in sharp disagreement.": Baseline Scenario's Simon Johnson; "The major banks now collecting federal bailout money were not unwitting victims of the mortgage meltdown but instead were directly linked to the root cause of the problem: a subprime lending machine concentrated in Southern California, a new study asserts.": LA Times; Congress will take a major step on Wednesday toward creating an independent panel with sweeping powers to investigate the root causes of the economic crisis. The House is expected to vote in support of a commission modeled on the Sept. 11 panel...": NYT; "Financial firms eager to return infusions from the $700 billion Troubled Asset Relief Program will have to demonstrate that they can operate without debt guarantees provided by the Federal Deposit Insurance Corp., a senior government official said Tuesday ...Treasury and the Federal Reserve are expected to issue TARP repayment guidelines on Wednesday": AP; "Top senators on the Banking Committee are revamping legislation the panel passed in late March and are expected to unveil it in coming days ... Many Senate Democrats want stricter limits on card companies' ability to raise rates on consumers who are paying their credit-card bills on time. But most Senate Republicans want credit- card companies to have the right to establish a price for credit based on risk...": WSJ.