The much anticipated stress test results were finally released on Thursday by the Federal Reserve reflecting that 10 of the nation's 19 largest banks need a total of about $75 billion in new capital.
The new capital will be used as a buffer against losses should the recession worsen.
The tests found stability in some of largest banks while others are in need of billions more in capital — a signal by regulators that the industry is vulnerable but viable.
According to government officials, a stronger banking system is needed for an economic rebound.
Officials hope the tests will restore investors' confidence that not all banks are weak, and that even those that are can be strengthened. They have said none of the banks will be allowed to fail.
The banks in need of more capital have until June 8 to come up with a plan and have it approved by their regulators.
Among the 10 firms that need to raise more capital, the tests said Bank of America Corp. needs by far the most: $33.9 billion. Wells Fargo & Co. requires $13.7 billion, GMAC LLC $11.5 billion and Citigroup Inc. $5.5 billion.
Wells Fargo and Morgan Stanley have already announced plans to raise capital.
Morgan Stanley, which the government says needs $1.8 billion in new capital, said it plans to raise $5 billion. That will include $2 billion in common stock.
According to the test results, losses at the 19 stress-tested firms during 2009 and 2010 could total $600 billion should the recession worsen.