Bank of America only needs 34,000 million more bucks and it will be ok. Soon the bank's name will be Bank Owned By America. Is there any doubt that some of these banks will have to be nationalized? It's all about derivatives, those toxic unregulated bets on almost anything financial. $34 billion will not be enough to save BofA.-Lou
Bank of America to need $34 bln in capital-source
WASHINGTON/NEW YORK, May 6 (Reuters) - Bank of America Corp has been deemed to need as much as $34 billion in additional capital, according to the results of a government stress test, a source familiar with the results told Reuters late on Tuesday.
Bank of America spokesman Scott Silvestri declined comment.
A possible $34 billion capital shortfall is certain to increase pressure on CEO Kenneth Lewis, who was last week ousted by shareholders as chairman of the biggest U.S. bank.
That ouster could lay the groundwork for Lewis's eventual departure from the company he worked at for 40 years, including the last eight as chief executive.
It may also unnerve investors who had hoped the results of the stress tests on Bank of America and 18 other banks might show the industry was in less dire condition than had been feared. Shares of major U.S. banks have nearly doubled since bottoming out in early March.
U.S. equity market futures extended losses on Wednesday and the yen gained following the news.
About 10 of the 19 banks being stress-tested are expected to need more capital buffers, a person familiar with the official talks has said. The person was not authorized to speak because the results are not public.
Many analysts have speculated that other banking companies that may need more capital, either because they do not have enough tangible common equity or are experiencing rising loan losses, include Citigroup Inc, Wells Fargo & Co, Fifth Third Bancorp, GMAC LLC, KeyCorp, Regions Financial Corp and SunTrust Banks Inc.
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