rssCiti, Bank of America Targeted in Stress Tests
Tuesday, April 28, 2009 at 8:54 am
- 3 Comments
The Wall Street Journal reports today that Citigroup and Bank of America may need to raise more capital, based on recent government stress tests of financial institutions. The identities of troubled banks were supposed to remain confidential, but The Journal cites the usual “people familiar with the situation.” Regulators contend the need for Citi and Bank of America to raise more capital does not mean that either bank is insolvent, according to the article, but in Bank of America’s case in particular, the capital shortfall may total billions of dollars.
Executives at both banks are objecting to the preliminary findings, which emerged from the government’s scrutiny of 19 large financial institutions. The two banks are planning to respond with detailed rebuttals, these people said, with Bank of America’s appeal expected by Tuesday.
The findings suggest that government officials are using the stress tests to send a tough message to struggling banks. Bank of America and Citigroup have been the highest-profile problem children in recent months, but it is unlikely that they are the only banks the Federal Reserve has determined might need more capital.
Regional banks that made a lot of commercial real estate loans also are in trouble, The Journal reports.
It looks like the coming battle over the financial system will be about defining the difference between a “stressed” bank and a totally insolvent one — if it even exists.
3 Comments
Comment posted April 28, 2009 @ 9:19 am
Ken Lewis may have committed blunders, but the real crooks are
sitting in Merrill Lynch. They don't work at all, they fly all over
the world, still spend lavishly while we suffer in the economic
recession. They spend 90% of their work day politicking internally to
protect their turfs and create their own groups. These arethe true
viruses of the BoFA-ML system.
We need to clean up Merrill Lynch where greed and power has been
perversed. We need to fire the following people at our shareholder
meet:
Thomas Montag, the head of global sales and trading at Merrill, made
$39.4m in 2008.
David Sobotka, now in charge of global proprietary trading, was paid
about $13m in 2008
David Gu, head of Merrill's global-rates division, made $18.7m in
2008, according to the figures.
Merrill's co-head of commodities, David Goodman, was paid $16.5m last
year, the figures show.
Fares Noujaim, who joined Merrill in 2008 and now heads Bank of
America's Middle East and Africa operations, made more than $15m in
2008, the figures show.
Peter Kraus, had an employment contract valued at $29.4m, the figures
show.
Andrea Orcel, the firm's top investment banker. Although Merrill's
net loss ballooned to $27.6bn (€22bn) last year, Orcel, 45 years
old, was paid $33.8m in cash and stock.
None of these guys have made money forthe firm, but only lost
billions!
They should be fired at our shareholder meet and under the Patriot
Act put behind bars.
Comment posted April 28, 2009 @ 4:19 pm
Ken Lewis may have committed blunders, but the real crooks are
sitting in Merrill Lynch. They don't work at all, they fly all over
the world, still spend lavishly while we suffer in the economic
recession. They spend 90% of their work day politicking internally to
protect their turfs and create their own groups. These arethe true
viruses of the BoFA-ML system.
We need to clean up Merrill Lynch where greed and power has been
perversed. We need to fire the following people at our shareholder
meet:
Thomas Montag, the head of global sales and trading at Merrill, made
$39.4m in 2008.
David Sobotka, now in charge of global proprietary trading, was paid
about $13m in 2008
David Gu, head of Merrill's global-rates division, made $18.7m in
2008, according to the figures.
Merrill's co-head of commodities, David Goodman, was paid $16.5m last
year, the figures show.
Fares Noujaim, who joined Merrill in 2008 and now heads Bank of
America's Middle East and Africa operations, made more than $15m in
2008, the figures show.
Peter Kraus, had an employment contract valued at $29.4m, the figures
show.
Andrea Orcel, the firm's top investment banker. Although Merrill's
net loss ballooned to $27.6bn (€22bn) last year, Orcel, 45 years
old, was paid $33.8m in cash and stock.
None of these guys have made money forthe firm, but only lost
billions!
They should be fired at our shareholder meet and under the Patriot
Act put behind bars.
Comment posted February 2, 2011 @ 3:08 pm
Fares Noujaim is a 1-trick pony. Ask him about sleeping with Pepsi execs
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