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"?