Even a mundane plant pot can become a GMOIt would not set limits to Saddam HusseinThe unions are for the time being hostileJust as a one man cannot replace an orchestra3 billion has some similarities with EurotunnelThe acquisition of Tele2 France by SFR was confirmed yesterdayYou have closed your year end tax of AprilAvéo is a network of 27 concessions created in 2008The Mayor and Pascal Viné Bruno no longer exitA very juicy system and obviously leads to swelling of the costsTim Geithner will not enjoyed his success a long time. The results of the tests of strength, but expected for weeks, were just announced that the controversy was, both on the criteria used by regulators and the pressure that they have suffered on the part of the larger institutions of the place. According to the American press this weekend, the banks subjected to the tests bitterly negotiated with the authorities, to reduce the amounts of considered additional capital needed to tackle the crisis.
According to the findings of the tests revealed Thursday, the own funds required to the 19 major banks studied for a hardening of the crisis, is estimated at $ 74.6 billion. But according to the Wall Street Journal, the figure calculated by the Federal Reserve was much higher. Thus, Bank of America initially need more $ 50 billion and non-33.9 billion, about $ 35 billion Citigroup and non-5.5 billion, and Wells Fargo of 17.3 billion, against $ 13.7 billion at the end.
Banks were however not expected to meet the figures advanced by the regulators. As early as Thursday, Morgan Stanley, whose needs are estimated at 1.8 billion dollars by the tests, had already lifted 8 billion market: 4 billion via an increase in capital and 4 others via an issuance of debt not guaranteed by the State. The funds will serve to repay the public money received ($10 billion) and to cover the needs revealed by testing. Similarly, as early as Friday, Wells Fargo for its part placed 341 million common shares on the market, to lift $ 7.5 billion. Or more than half of the 13.7 billion required by the Treasury.
Capital research
Bank of America, on which rests the stronger requirement since it must find $ 33.9 billion, is ready to issue 18 billion of shares, and wants to transform preferential shares held by institutional investors in shares. In a telephone conference, Ken Lewis, CEO of Bank of America, stated that he could sell for $ 10 billion of assets which could include Columbia Management and First Republic Bank. The Bank has already received 45 billion of the State, and a guarantee on 118 billion of dollars of assets in distress. It would now be freed of this warranty. "The rule of the game is to remove the Government of our Bank as quickly as possible," said Ken Lewis. Meanwhile, Citi, which have well defended its interests with the authorities, has also asked investors to convert their preferred shares into ordinary shares.
The research of capital may be more difficult for smaller as Regions Financial, SunTrust banks or Fifth Third Bancorp should not lift that between 1 and 2 billion but why expected losses between 9 and 11 billion by 2010. The Government could again intervene, even if he wants to be first private investors. "It was appropriate to carry out these tests, but it will still take some time before the banking system and the economy recovering, said John Douglas, responsible for the banking sector in the law firm Paul Hastings." This was useful, but it is a good thing that it is finished.
A competitive advantage
Clearly, some financial institutions emerge winners of the lot. Goldman Sachs, but JP Morgan Chase (read below), American Express, Capital One, US Bancorp, Bank of New York Mellon, and a few others. At the end of the tests of resistance, they appear more solid and especially to repay as soon as now the money of the State. They will quickly regain their independence and perhaps gain a competitive advantage that drain into them, say some observers, investors and talents. "After the"stress tests", the stronger banks will be even more," says Terry Moore, head of the banking sector in North America for Accenture." There will be less competition, they have solved some problems and will be well capitalized. "Rest, depending on the scenario the most conservative retained by the public authorities, all of the surveyed banks could cope with a potential loss of 599 billion by 2010.
