Most large banks pass government 'stress test'

$74.6 billion. Seventy-four point six billion dollars. Let's look at that again: it's seventy-four billion, 600 million dollars. Believe it or not, that's what U.S. banks still need, and that's good news. That number that sparked a sigh of relief in U.S. financial circles today because it was a lot lower than many iduustry leaders feared would be needed to prop up the banking system. Today's release of results of the Federal Reserve's so-called stress tests of the 19 largest U.S. banks sent many of the 10 who need more capital scrambling to develop plans to raise it, according to the Reuters international news service. Bank of America, the historic San Francisco banking giant that was purchased by NationsBank of North Carolina in 1998, was found to be lacking nearly $34 billion in reserves, slightly less than half of the entire industry shortfall. "We're going to be watching carefully to make sure they give us credible plans for raising capital and becoming privately owned again," said Ben Bernanke, chairman of the Federal Reserve, referring to the entire group of banks, Reuters reported. Bank of America immediately offered plans to raise most the money it needed through issuance of new stock and asset sales. Other banks identified in the Fed's report, written after more than 150 officials examined the banking institutions' books, issued similar statements, Reuters said. Other banks found wanting included Wells Fargo, which was found to need $13.7 billion; GMAC, the auto and home loan finance company, which was found to need $11.5 billion, and Citigroup, which was ordered to raise $5.5 billion. The federal government expects banks to be able to raise the money privately, Reuters reported, but Bernanke said the United States "stands ready to provide whatever additional capital may be necessary to ensure that our banking system is able to navigate a challenging economic downturn." U.S. stock futures were up following release of the figures, but some critics said the Federal Reserve examination was not rigorous enough. "I'm a skeptic," said Robert Andres, president of Andres Capital Management in Philadelphia, Reuters said. "I don't see this as a genuine audit. They have been playing the marketing game strongly lately." The reviews were designed to measure how the banks would be able to perform if the recession worsened, Reuters said.