The U.S. big banks keep claiming to be in a healthy state according to regulatory standards but I don’t think that the people are buying it, and neither is the Obama administration. The administration has called for 20 large banks to go through a tough new “Stress Test” by federal regulator to determine if they will be able to withstand a severe economic downturn. While certain banks like Citi Group and Bank of America claim to be ok many economists think otherwise. Citi Group is looking at its third infusion of cash from the bailout which will move taxpayers share in the company from 8% to 30-40%.
Upon the results of the “Stress Test” banks that have failing results will be required to raise capital which will again more than likely come from taxpayer’s dollars. The exact details on testing structure have not been released but two key elements that will be looked at are, common stock and the bank’s ability to cope with an unemployment rate of 10-12%. People we are really in some interesting times. The amount of money that has been passed out to our financial system is mind boggling, considering that for decade’s inner cities all across America has needed to be bailout. For a long time there has been a need for an infusion of cash to administer proper education to students, create after school programs, keep guns and drugs off the streets… yo I’m really sick with my country right now this is a mess.
