Bank of America Needs $34 Billion

We got your stress right here: We won’t get the official stress test results until tomorrow, but the dollar amount needed to be raised privately at the House of Lewis is $33.9 billion dollars.

Alternatively, BofA could convert Uncle Sam’s non-voting preferred shares. That would give the taxpayer a significant, potentially majority stake in the company.

The info was leaked by an executive at the bank. My best guess is the bank is lobbying to get a lower stress test number.

19 banks are going through the stress test, and 10 are believed to need more capital.

Another report suggests that Wells Fargo needs to raise capital — despite recent statements from Warren Buffett: “Federal regulators are asking Wells Fargo & Co. to raise more capital after government “stress tests” showed the bank would have trouble surviving if the recession worsens.”

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Source:
U.S. Says Bank of America Needs $33.9 Billion Cushion
LOUISE STORY and ERIC DASH
NYT, May 5, 2009
http://www.nytimes.com/2009/05/06/business/06stress.html

Sources: U.S. Asking Wells Fargo To Boost Capital
Associated Press/NPR.org, May 4, 2009
http://www.npr.org/templates/story/story.php?storyId=103777070

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