[Pen-l] good news?

[Jim Devine <jdevine03@xxxxxxxxx>]

May 21, 2009 / New York TIMES

Banks Have Raised Billions Since Test, Geithner Says
By JACK HEALY

The country’s biggest banks have made moves to bolster their balance
sheets by some $56 billion since the government unveiled the results
of its financial “stress tests” two weeks ago, Treasury Secretary
Timothy F. Geithner said on Wednesday.

In testimony before the Senate Banking Committee in Washington, Mr.
Geithner said the country’s largest financial institutions had raised
billions by issuing common stock and new debt, including $8 billion in
bonds not guaranteed by the government.

After conducting a months-long review of 19 of the country’s largest
financial institutions, regulators found that 10 needed to raise a
total of $75 billion in additional capital to withstand losses if the
economy took another turn for the worse. The government said banks
could raise the money privately, or convert their preferred shares
held by the government to common stock.

Since then, the 19 banks have raised or announced plans to raise $56
billion — $48 billion of which came from the 10 banks that needed to
bolster their capital levels, Mr. Geithner said.

[But to what extent are these institutions upping their capital by
restricting credit, holding on to money rather than lending it?]
-- 
Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own
way and let people talk.) -- Karl, paraphrasing Dante.
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