At least three of the 19 financial institutions with assets in excess of $100bn may face pressure to build up capital reserves after failing to meet desired operational projections through the government-mandated stress tests, unnamed sources told the Wall Street Journal. The identities of the three firms remained confidential at the time this story went to press, but analysts told the Journal they likely include regional banks with commercial real estate exposure in the Midwest and Southeast. The stress tests aimed to determine whether major US banks retain enough capital to weather even the more adverse economic projections. Federal officials offered three alternatives to banks that lack sufficient reserves: raise private investor funds, receive additional government aid or convert the government’s existing preferred shares into common shares, effectively placing part of the firm in government ownership. The Federal Reserve, in reporting stress test methods late Friday, say most banks retain enough capital to weather a longer, more severe recession, although deteriorating economic conditions affect the reserve capital held among some banks. Write to Diana Golobay at [email protected].
Three Big Banks Need Funding: WSJ
Most Popular Articles
Latest Articles
Secondary mortgage market adjusts to higher-for-longer rates
A range of experts across a variety of secondary mortgage market sectors offered their thoughts on the market dynamics at play.
-
Keller Williams faces another lawsuit by a former agent
-
Former eXp agent accused of sexual assault sues the firm for defamation
-
eXp posts $15.6M loss in Q1 2024
-
Real estate farming: Become the go-to agent in your area using these tips, tools & strategies
-
Zillow believes the evolution of the industry will only help it grow