Citigroup (C) and Bank of America (BAC), two of the largest financial firms reported to lack necessary capital under federal regulators' stress tests, are racing to raise more than $10bn apiece in private capital. Citigroup and Bank of America, two of the largest financial firms reported to lack necessary capital under federal regulators' stress tests, are racing to raise more than $10bn apiece in private capital. The inner-circle moves are meant to come as a supplement beyond the billions of dollars in TARP funds already received, unnamed sources told the Financial Times. The ability to raise such levels of private capital would show investor confidence in the firms. And for some of the banks, failure is not an option. Citi is in discussions to force holders of more than $15bn of trust preferred shares to transfer to common stock. Citi may threaten to cease interest payments to stock holders that refuse, sources told Financial Times. The conversion of this stock may stave off further government intervention, including the conversion of the Treasury Department's investment into common stock, creating something of an ownership stake in Citi. The federal regulators are scheduled to present the remaining test results to 19 banks today and make the results public later this week, possibly as early as Thursday. In the face of public uncertainty over the details of the test results, Berkshire Hathaway (BRK-A) chairman Warren Buffett at a Sunday press conference said at least 15 of the 19 banks were not too big to fail. "Those banks could fail and be transferred to other lenders without it costing the taxpayer anything," Buffett said, according to a MarketWatch bulletin. "Those 15 for sure would find a home if the [Federal Deposit Insurance Corp.] decided to move on them next weekend." Write to Diana Golobay at diana.golobay@housingwire.com. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.