6 Major Banks Fail Initial Stress Tests

6 of the major 19 banks failed the Treasury’s “stress tests” and need more cash as a buffer against losses, according to leaked preliminary results.

The Treasury’s “stress tests” are an intensive auditing of the banks’ books to see whether they can meet their financial obligations. The money is likely to come from converting “preferred shares” into “common equity,” rather than additional government funding, which no one has much political stomach for anymore, economics be damned.

Fed Is Said to Seek Capital for at Least Six Banks [Bloomberg] (Photo: willsfca)