Reports Bank of America (BAC) Needs Another $35B In Capital To Cover "Stress Test" Losses
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According to reports from the Wall Street Journal, Bank of America (NYSE: BAC) needs roughly $35 billion in extra capital to cover future losses expected under scenarios in the government's stress test.
To boost its tangible common equity ratio, which has become the standard on how banks are measured for capital adequacy, Bank of America may convert some of the government's preferred shares into common shares. This would dilute Bank of America's current common shareholders futher.
Regulators recently notified the 19 companies subjected to the government's tests of the results, with recent reports suggesting that 10 of the 19 need to boost their capital level to cover future losses.
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