Posted: May 5th, 2009, 3:47 pm
MAY 5, 2009
<span style='font-size:14pt;line-height:100%'>More Banks Will Need Capital </span>
Stress Tests Identify About Ten; Wells, BofA, Citigroup Face Order to Refill Coffers
By DAMIAN PALETTA and DEBORAH SOLOMON
WASHINGTON -- The U.S. is expected to direct about 10 of the 19 banks undergoing government stress tests（次贷及金融危机后奥巴马政权要求相关银行进行的压力测试，以评估金融危机下银行机构应对未来困境的能力） to boost their capital, according to several people familiar with the matter, a move that officials hope will quell fears about the solvency of the financial sector（消除由于金融业偿债能力不足所引发的恐慌）.
The exact number of banks affected remains under discussion. It could include Wells Fargo & Co., Bank of America, Citigroup Inc. and several regional banks. At one point（一度，曾）, officials believed as many as 14 banks would need to raise more funds to create a stronger buffer against future losses, these people said, but that number has fallen in recent days.
Representatives from Wells, Bank of America and Citi declined to comment.
The Obama administration announced the stress tests -- <span style='color:red'>a process of examining banks' ability to withstand future losses</span> -- back in February. At the time, the news sparked concern among investors and depositors that the results would be used to shut down or nationalize some of the country's weaker institutions. But Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner assured investors that none of the banks undergoing stress tests would be allowed to fail and that all would have access to government funds if needed.
In fact, the stress-test regimen（a systematic plan especially when designed to improve and maintain the health of a patient，相当于救援方案） appears so far to have eased some of the fears that swept through financial markets in February, just as President Franklin D. Roosevelt's bank holiday did in 1933. He shut down the nation's banks for several days during a banking panic and only reopened those the government deemed safe. One possible explanation for the recent, calmer state of affairs: The problems the tests appear to be uncovering aren't as bad as some analysts' worst expectations（作者认为压力测试结果并未引发更严重事态的可能原因是该结果并不那么糟糕）.
Also, if multiple banks are being directed to boost their capital, that could make the process seem less daunting than if it were singling out a few companies as weak.
In a sign of how much the doomsday scenario has faded, bank stocks surged Monday despite reports that Wells Fargo was identified in an initial review as one of the financial institutions needing a stronger buffer（富国银行曾在首次评估中被列为困难户，buffer原意为缓冲，此处意指需要更多的救援措施或资金）.
The San Francisco bank's stock jumped 24%, or $4.64, to $24.25 in New York Stock Exchange composite trading at 4 p.m. Bank of America shares rose 19% on Monday, while Citigroup was up 7.7%.
The stock prices of all three banks, which may need to raise tens of billions in new capital as a result of the stress tests, have tripled since early March.
It's possible Wall Street is being overly optimistic（过度乐观，即指华尔街银行家们对压力测试结果的有利因素以及因此产生的银行筹资前景过高估计） about the impact of the results and the resulting dash by banks to bolster capital. One big risk worrying industry officials is that the market will view banks on the list as insolvent when the official results are announced Thursday, even though Fed officials have repeatedly said that's not the case.
Several banks are expected to already have enough capital to weather a worsening economy, including Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. J.P. Morgan Chase Chairman and Chief Executive James Dimon expressed confidence Monday that the banking system can withstand losses from the recession, even though it will take years for the industry to recover.
"The banking system can handle an awful lot of stress and be OK," he said in a Monday conference call sponsored by Calyon Securities Inc., a unit of Credit Agricole Group.
Mr. Dimon also reiterated J.P. Morgan's goal to repay the $25 billion the New York bank received from the government last year "as soon as possible," saying company officials plan to discuss details of the potential repayment after the stress-test results are announced.
An initial stress test identified Wells Fargo as among the banks needing a bigger buffer, said a person close to the company. It is unclear whether Wells would be forced to raise fresh capital or if regulators would accept the bank's argument that it can earn its way through the losses in future years. Wells expects more clarity Tuesday.
Any bank holding company with more than $100 billion in assets was required to undergo the tests, which were largely conducted by the Fed. Their purpose was to ensure that major financial institutions had enough capital to continue lending if the economy worsened through 2010. Government officials are expected to meet with banks beginning Tuesday to go over final results. Banks directed to raise more capital aren't necessarily in trouble today, but regulators think they don't have enough of a buffer against potential future losses.
Administration officials believe many banks will be able to raise capital without tapping the Troubled Asset Relief Program's remaining $109.6 billion. They're optimistic the bulk of the money will come from private investors made more confident by the glut of information provided by the tests. Banks could sell assets and stakes in their companies, a move that could accomplish another government goal of shrinking some of the country's largest banks.
Officials say banks that can't tap private markets will be able to raise capital by agreeing to convert some of the government's existing preferred shares into common equity（普通股，相对于前面的优先股/有限股，具有更多利益）, a move that would leave the government owning chunks of the nation's largest banks.
"There undoubtedly will be banks that need more capital," White House spokesman Robert Gibbs said Monday in a news briefing. He said he didn't believe the Obama administration would need to ask Congress for more money. "I think everyone involved will be looking for banks to raise this through either private means or the selling of some assets that they have or that they control（某些银行机构或通过出售自有或掌控之中的资产来筹资）."
The tests have set off some tense exchanges in private（私下） between Treasury officials and bank regulators at the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency, who worried that disclosing too much information publicly could threaten the health of banks that are trying to repair themselves.
The Fed plans to release the results of the stress tests on Thursday after U.S. stock markets close. Anticipating the test results, McGraw-Hill Cos.' Standard & Poor's Ratings Service unit（标准普尔评级服务部门，为金融等机构进行信用评级） put on watch for downgrade the credit ratings of 22 banks and one thrift（亦称thrift institution，用于美国英语，相当于储蓄所一类的提供存取款服务的机构）.
The affected companies face at least a 50% chance of being downgraded by at least one notch（专业等的水平或等级） in the next 90 days.
—Dan Fitzpatrick and Robin Sidel contributed to this article.
source: <a href='http://online.wsj.com/article/SB124148189109785317.html' target='_blank'>http://online.wsj.com/article/SB1241481 ... 17.html</a>
ref links:
<a href='http://chinese.wsj.com/gb/20090505/bus095659.asp' target='_blank'>压力测试给投资者的压力正在消退</a>
<a href='http://chinese.wsj.com/gb/20090504/hrd1 ... ce=channel' target='_blank'>银行业压力测试深藏玄机</a>
<a href='http://chinese.wsj.com/gb/20090505/bus091348.asp' target='_blank'>压力测试结果表明富国银行须增资</a>
<span style='font-size:14pt;line-height:100%'>More Banks Will Need Capital </span>
Stress Tests Identify About Ten; Wells, BofA, Citigroup Face Order to Refill Coffers
By DAMIAN PALETTA and DEBORAH SOLOMON
WASHINGTON -- The U.S. is expected to direct about 10 of the 19 banks undergoing government stress tests（次贷及金融危机后奥巴马政权要求相关银行进行的压力测试，以评估金融危机下银行机构应对未来困境的能力） to boost their capital, according to several people familiar with the matter, a move that officials hope will quell fears about the solvency of the financial sector（消除由于金融业偿债能力不足所引发的恐慌）.
The exact number of banks affected remains under discussion. It could include Wells Fargo & Co., Bank of America, Citigroup Inc. and several regional banks. At one point（一度，曾）, officials believed as many as 14 banks would need to raise more funds to create a stronger buffer against future losses, these people said, but that number has fallen in recent days.
Representatives from Wells, Bank of America and Citi declined to comment.
The Obama administration announced the stress tests -- <span style='color:red'>a process of examining banks' ability to withstand future losses</span> -- back in February. At the time, the news sparked concern among investors and depositors that the results would be used to shut down or nationalize some of the country's weaker institutions. But Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner assured investors that none of the banks undergoing stress tests would be allowed to fail and that all would have access to government funds if needed.
In fact, the stress-test regimen（a systematic plan especially when designed to improve and maintain the health of a patient，相当于救援方案） appears so far to have eased some of the fears that swept through financial markets in February, just as President Franklin D. Roosevelt's bank holiday did in 1933. He shut down the nation's banks for several days during a banking panic and only reopened those the government deemed safe. One possible explanation for the recent, calmer state of affairs: The problems the tests appear to be uncovering aren't as bad as some analysts' worst expectations（作者认为压力测试结果并未引发更严重事态的可能原因是该结果并不那么糟糕）.
Also, if multiple banks are being directed to boost their capital, that could make the process seem less daunting than if it were singling out a few companies as weak.
In a sign of how much the doomsday scenario has faded, bank stocks surged Monday despite reports that Wells Fargo was identified in an initial review as one of the financial institutions needing a stronger buffer（富国银行曾在首次评估中被列为困难户，buffer原意为缓冲，此处意指需要更多的救援措施或资金）.
The San Francisco bank's stock jumped 24%, or $4.64, to $24.25 in New York Stock Exchange composite trading at 4 p.m. Bank of America shares rose 19% on Monday, while Citigroup was up 7.7%.
The stock prices of all three banks, which may need to raise tens of billions in new capital as a result of the stress tests, have tripled since early March.
It's possible Wall Street is being overly optimistic（过度乐观，即指华尔街银行家们对压力测试结果的有利因素以及因此产生的银行筹资前景过高估计） about the impact of the results and the resulting dash by banks to bolster capital. One big risk worrying industry officials is that the market will view banks on the list as insolvent when the official results are announced Thursday, even though Fed officials have repeatedly said that's not the case.
Several banks are expected to already have enough capital to weather a worsening economy, including Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. J.P. Morgan Chase Chairman and Chief Executive James Dimon expressed confidence Monday that the banking system can withstand losses from the recession, even though it will take years for the industry to recover.
"The banking system can handle an awful lot of stress and be OK," he said in a Monday conference call sponsored by Calyon Securities Inc., a unit of Credit Agricole Group.
Mr. Dimon also reiterated J.P. Morgan's goal to repay the $25 billion the New York bank received from the government last year "as soon as possible," saying company officials plan to discuss details of the potential repayment after the stress-test results are announced.
An initial stress test identified Wells Fargo as among the banks needing a bigger buffer, said a person close to the company. It is unclear whether Wells would be forced to raise fresh capital or if regulators would accept the bank's argument that it can earn its way through the losses in future years. Wells expects more clarity Tuesday.
Any bank holding company with more than $100 billion in assets was required to undergo the tests, which were largely conducted by the Fed. Their purpose was to ensure that major financial institutions had enough capital to continue lending if the economy worsened through 2010. Government officials are expected to meet with banks beginning Tuesday to go over final results. Banks directed to raise more capital aren't necessarily in trouble today, but regulators think they don't have enough of a buffer against potential future losses.
Administration officials believe many banks will be able to raise capital without tapping the Troubled Asset Relief Program's remaining $109.6 billion. They're optimistic the bulk of the money will come from private investors made more confident by the glut of information provided by the tests. Banks could sell assets and stakes in their companies, a move that could accomplish another government goal of shrinking some of the country's largest banks.
Officials say banks that can't tap private markets will be able to raise capital by agreeing to convert some of the government's existing preferred shares into common equity（普通股，相对于前面的优先股/有限股，具有更多利益）, a move that would leave the government owning chunks of the nation's largest banks.
"There undoubtedly will be banks that need more capital," White House spokesman Robert Gibbs said Monday in a news briefing. He said he didn't believe the Obama administration would need to ask Congress for more money. "I think everyone involved will be looking for banks to raise this through either private means or the selling of some assets that they have or that they control（某些银行机构或通过出售自有或掌控之中的资产来筹资）."
The tests have set off some tense exchanges in private（私下） between Treasury officials and bank regulators at the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency, who worried that disclosing too much information publicly could threaten the health of banks that are trying to repair themselves.
The Fed plans to release the results of the stress tests on Thursday after U.S. stock markets close. Anticipating the test results, McGraw-Hill Cos.' Standard & Poor's Ratings Service unit（标准普尔评级服务部门，为金融等机构进行信用评级） put on watch for downgrade the credit ratings of 22 banks and one thrift（亦称thrift institution，用于美国英语，相当于储蓄所一类的提供存取款服务的机构）.
The affected companies face at least a 50% chance of being downgraded by at least one notch（专业等的水平或等级） in the next 90 days.
—Dan Fitzpatrick and Robin Sidel contributed to this article.
source: <a href='http://online.wsj.com/article/SB124148189109785317.html' target='_blank'>http://online.wsj.com/article/SB1241481 ... 17.html</a>
ref links:
<a href='http://chinese.wsj.com/gb/20090505/bus095659.asp' target='_blank'>压力测试给投资者的压力正在消退</a>
<a href='http://chinese.wsj.com/gb/20090504/hrd1 ... ce=channel' target='_blank'>银行业压力测试深藏玄机</a>
<a href='http://chinese.wsj.com/gb/20090505/bus091348.asp' target='_blank'>压力测试结果表明富国银行须增资</a>