The Financial Bailout Fiasco

Of the 19 largest U.S. financial institutions Ten will be required to raise $75 billion in capital. The U.S. government for the first time divided healthy banks from those which may need more money to weather a worsening economy.

U.S. officials stressed that the move to bolster capital needs to occur across the banking industry, not just at the 19 largest firms. Treasury Secretary Timothy Geithner said the department will reopen existing programs to make capital available to banks of all sizes, suggesting the U.S. government's intervention in the financial markets could go on longer than expected. "It's very important that the rest of the system has the access to capital," Mr. Geithner said.

He added later: "When you have the opportunity to raise capital, you should raise capital."
Bank of America Corp., Citigroup Inc., Wells Fargo & Co., GMAC LLC and Morgan Stanley were told they need to raise capital due to the results of the government's stress tests. Regions Financial Corp., Fifth Third Bancorp, KeyCorp, PNC Financial Services Group Inc. and SunTrust Banks also were told to bolster their reserves.

The ten banks being required to raise additional capital are: Bank of America Corp. (NYSE: BAC), $33.9 billion; Citigroup Inc. (NYSE: C), $5.5 billion; Fifth Third Bancorp (NYSE: FITB), $1.1 billion; GMAC LLC (NYSE: GJM), $11.5 billion; KeyCorp (NYSE: KEY), $1.8 billion; Morgan Stanley (NYSE: MS), $1.8 billion; PNC Financial Services Group Inc. (NYSE: PNC), $600 million; Regions Financial Corp. (NYSE: RF), $2.5 billion; SunTrust Banks Inc. (NYSE: STI), $2.2 billion; Wells Fargo & Co. (NYSE: WFC), $13.7 billion.

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