How Will Banks Raise Nearly $75 Billion?
 Monday, May 11th, 2009  by Connie T.

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In February, the Barack Obama administration ordered the 19 biggest banks in America to undergo stress tests to see if they could withstand any further economic strain. Last week, the Board of Governors of the Federal Reserve System released their results.

(I was waiting by the phone in case the Fed wanted to analyze whether I could handle another economic plummet, but no one called...)

The results of the SCAP (Supervisory Capital Assessment Program) suggest that "if the economy were to track the more adverse scenario, losses at the 19 firms during 2009 and 2010 could be $600 billion." The majority of these losses would be attributed to loan portfolios, mostly from residential mortgages and other consumer loans.

The institutions monitored for economic outcome were: American Express Company; Bank of America Corporation; BB&T Corporation; The Bank of New York Mellon Corporation; Capital One Finance Corporation; Citigroup, Inc.; Fifth Third Bankcorp; GMAC LLC; The Goldman Sachs Group, Inc.; JPMorgan Chase & Co.; KeyCorp; MetLife, Inc.; Morgan Stanley; PNC Financial Services Group, Inc.; Regions Financial Corporation; State Street Corporation; SunTrust Banks, Inc.; U.S. Bancorp; and Wells Fargo & Company.

The banks who would have the biggest projected losses if the "adverse scenario" occurs: Bank of America could lose $136.6 billion, Citigroup could lose $104.7 billion, and JPMorgan & Chase could lose $97.4 billion.

Some of these banks are saying they will sell billions of shares in stock as part of their effort to build the capital cushion the Fed states they need. While this sounds great, I'm wary that it's not the only trick the big banks will have up their sleeve: after all, it's certainly been easy enough for financial institutions to rake in $50 billion in a year by penalizing consumers.


While the spotlight is on the banks, let's work to ensure their practices are fair to the consumers and not just the CEO's. Sign our petition today to demand fair practices in overdrafts, services, and fees.

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