The stress test conducted by the US Government has showed that some of the country’s largest banks may still need more capital. Wall Street Journal reports that Bank of America, Citigroup, Wells Fargo and Morgan Stanley are among the institutions that need to raise more capital. Others like GMAC, State Street and Regions Financial have also been told by the Federal Reserve to raise more capital.
Those in the clear, who would not need additional capital are Goldman Sachs, J.P. Morgan Chase, Capital One, American Express, Bank of New York Mellon and MetLife. The test was conducted on the largest 19 U.S. banks.
According to reports, Bank of America could be facing a shortfall of around $34 billion. Wells Fargo may need around $15 billion more, while Citigroup will need additional $5 billion.
The stress tests are part of the efforts by US administration under President Barack Obama to nurse the financial system back to health. The results could lead to the government exercising more control over Wall Street institutes. The banks facing a capital shortfall have until June 8 to present a fundraising plan and until November 9 to meet the demands.