Citigroup May Need $10 Billion More In Capital

By
Real Estate Broker/Owner

The Wall Street Journal is reporting that Citigroup may need to raise an additional $10 billion in capital due to the findings of the Federal Reserve's stress tests.

The results of the stress tests are due to be published this Thursday. 

Not surprisingly, from what has been leaked so far, it appears that all 19 banks are "solvent".

So despite the fact that Citigroup has recevied $45 billion in loans from Uncle Sam, and the fact that they have had $300 billion worth of their loans guaranteed by the tax payer, they are considered to be solvent.  And yet here they are again, needing more capital.

I wonder, would there ever be a stress test result in which a major bank was declared insolvent, or are we going to continue to funnel more tax payer money into these failed institutions with programs like the PPIP all in the name of removing "toxic assets" and "recapitalization" and "greasing the credit markets"? 

 

 

Comments (4)

1~Judi Barrett
Integrity Real Estate Services 118 SE AVE N, Idabel, OK 74745 - Idabel, OK
BS Ed, Integrity Real Estate Services -IDABEL OK

I wonder if our Federal Government would pass a stress test if it had to take one before any more money could be given away....

May 04, 2009 04:00 PM
Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

Mark - Personally, I think the stress test results are going to be a whole lotta fluff.  I don't believe for one second that the Fed are going to allow anything scary be released or be known.  It's simply not in in THEIR best interest to be completely honest.

May 04, 2009 04:02 PM
Mark MacKenzie
Phoenix, AZ

Judi:  Who needs to pass a stress test when you have the Federal Reserve? ;)

Donne:  Agreed.  There is no way we can get an independent assessment of our banking system from the government.

May 04, 2009 04:11 PM
Debra Cernick
DeShazer Ryan Realty - Libby, MT

Mark- There is just no way this is a good thing. Stress test-- I know we are all stressed about it.

May 04, 2009 04:37 PM