The Federal Reserve of the United States released the results of the assessment the top US banks and their financial conditions.
The exercise known as 'Stress tests' was conducted by the Federal Reserve, the office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation.
According to the stress tests, ten of the 19 largest banks need to raise a total of $74.6 billion dollars to build up capital buffers in the event of a deeper economic slump, officials said Thursday.
The Federal Reserve said the much-anticipated tests show that the banking system can withstand an adverse economic scenario but will be required to raise fresh capital to boost their reserves against losses.
The results released today should provide considerable comfort to investors and the public. The examiners found that nearly all the banks that were evaluated have enough Tier 1 capital to absorb the higher losses envisioned under the hypothetical adverse scenario. said the Federal Reserve chairman,
Ben S. Bernanke.
Roughly half the firms need to enhance their capital structure to put greater emphasis on common equity, which provides institutions the best protection during periods of stress. he said.
Among the 19 banks tested, Bank of America had the largest need at $33.9 billion, the Wells Fargo with $13.7 billion.
Bernanke said the Federal Reserve will do its part with the other agencies to restore stability and prosperity of the U.S. economy.