U.S. starts “stress tests” for major banks
WASHINGTON, Feb. 25 (Xinhua) — U.S. regulators announced on Wednesday the start of “stress tests” to gauge the health of the nation’s biggest banks.
The tests were aimed “to determine if the largest U.S. banking organizations have sufficient capital buffers to withstand the impact of an economic environment that is more challenging than is currently anticipated.”
Eligible U.S. banking institutions with assets in excess of 100 billion dollars on a consolidated basis are required to participate the tests, according to a joint statement released by the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the Federal Reserve.
Examiners “will assess institution-specific potential losses and estimated resources to absorb those losses under the baseline and more adverse case, and determine whether the institution has a sufficient capital buffer necessary to ensure each institution has the amount and quality of capital necessary to perform their vital role in the economy.”
The regulators said they expect to complete the assessment process as soon as possible, but no later than the end of April.
Meanwhile, the Treasury Department also said that the nation’s largest banking institutions can get further support from the government’s 700 billion dollar financial bailout fund.
The new support, named as the Capital Assistance Program (CAP), will be provided through the government’s purchase of preferred shares of the bank stock that are convertible into common shares at a 10 percent discount to their price before Feb. 9.
”In light of the current challenging market environment, the Treasury is making government capital available immediately through the CAP to eligible banking institutions to provide this buffer,” said a statement released by the Treasury.
U.S. President Obama calls for tougher financial regulations
WASHINGTON, Feb. 25 (Xinhua) — U.S. President Barack Obama Wednesday called on lawmakers to create tougher new financial industry regulations to prevent similar crisis.
“Strong financial markets require clear rules of the road, not to hinder financial institutions but to protect consumers and investors and ultimately to keep those financial institutions strong,” Obama told the press after meeting with his economic team.Full story
U.S. Treasury agrees to pour more money into major banks
WASHINGTON, Feb. 25 (Xinhua) — U.S. Treasury Department announced on Wednesday that the nation’s largest banking institutions can get further support from the government’s 700 billion dollar financial bailout fund.
The new support, named as the Capital Assistance Program (CAP),will be provided through the government’s purchase of preferred shares of the bank stock that are convertible into common shares at a 10 percent discount to their price before Feb. 9. Full story
White House rejects rumors of bank nationalization
WASHINGTON, Feb. 20 (Xinhua) — The Obama administration said Friday it is not trying to take over Citigroup Inc. and Bank of America Corp., two ailing financial institutions.
“This administration continues to strongly believe that a privately held banking system is the correct way to go, ensuring that they are regulated sufficiently by this government,” said White House Press Secretary Robert Gibbs. Full story
U.S. government in stake talks with Citigroup
NEW YORK, Feb. 22 (Xinhua) — The U.S. government may end up holding as much as 40 percent of Citigroup’s common stock, the Wall Street Journal said on its website Sunday.
Citigroup Inc. is in talks with federal officials that may increase the government’s ownership of the bank, the report said. Full story
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