The Federal Reserve released the results of its "stress tests" for 19 major banks. Of them, 10 still need financial help totaling $75 billion.
>> Now to those so called stress tests the government's been giving the country's biggest banks to see if they could survive if the recession got worse. Some of the results have been leaking out but today we got the official findings and our business correspondent Anthony Mason has them. Anthony
>> Harry a 150 examiners have been looking at these 19 major banks for the past few months. Well the government says none are insolvent. Some do need an extra cushion as insurance against a deeper recession.
>> In all, 10 of the country's largest banks were told they need to raise more capital led by Bank of America which must come up with nearly $34 billion. Wells Fargo nearly 14 billion, GMAC the financing arm of General Motors 11.5 billion and CitiGroup 5.5 billion. The 9 banks that have sufficient buffers and don't need more money include American Express and JD Morgan Chase.
>> Our hope is with these actions today banks are going to be able to get back to the business of banking.
>> The banks have until November to raise more capital either by selling assets or issuing more common stock. Wells Fargo and Morgan Stanley immediately announced new stock offerings and analysts believe most won't need to go back to the government for help.
>> I believe they can raise money today yes.
>> But Paul Miller worries the governments test wasn't stressful enough. The severe scenario simulated unemployment hitting 10%. Miller believes that should have been 12%.
>> But if it stays at 10% the economy is much better than we thought they we won't have to come back to the market anymore and we will start getting digging ourselves out of this recession.
>> Wall Street has regained confidence in the banks. Bank of America and Wells Fargo stock have rallied more than 300% since March. CitiGroup has rebounded more than 200%. Analyst Colon assumed spelling Gilbert called the stress test a turning point.
>> Because it's finally giving some clarity into the capital structures of the banks which has been what's dragged these banks into the ground for the last 6 to 12 months.
>> The economy is still fragile but the treasury believes there'll be far less risk of a deep recession if confidence can be restored to the banking system. Harry.
>> Anthony Mason thanks.
==== Transcribed by Automatic Sync Technologies ====
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