Daily Forex News

The USD succumbed this past week, falling across the board, as stocks and commodities continued to strengthen as incoming data continues to suggest the worst is over in the current downturn. Employment data in Australia and Canada surprised to the upside, when further job losses were expected, and those currencies…

Stress tests shrugged off by financial markets

The results of the banks stress tests undertaken by the Treasury Department have been officially released (yesterday), and they aren’t especially surprising. 10 of the 19 biggest banks surveyed have been found to need capital. However, these banks aren’t in such bad shape that they aren’t capable of surviving. Combined, the 10 banks are expected to need close to $75 billion. The banks that the government says are in need of capital include:

1. Bank of America, $33.9 billion.
2. Wells Fargo, $13.7 billion.
3. GMAC, $11.5 billion.
   
4. Citigroup, $5.5 billion.
5. Regions Financial, $2.5 billion.
6. SunTrust, $2.2 billion.
7. Morgan Stanley, $1.8 billion.
8. KeyCorp, $1.8 billion.
   
9. Fifth Third, $1.1 billion.
10. PNC, $600 million.

These banks are expected to create plans to raise capital in order shore themselves up. Implementation deadline is November 9, 2009. A great deal of this was expected, and so the financial markets reacted by largely shrugging the results off. Additionally, things aren’t that bad (stress tests have been analyzed in such a way as to present a reasonably sound picture while issuing warnings), and investors are certain that none of these banks will be allowed to fail.

See Also

• Financial Markets and Stress Tests
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