When the FT reported that Bank of America (BAC) would need to raise “well in excess” of $10 billion in order to please regulators, they weren’t kidding.
Reuters is now reporting that the stress test veridct is that BofA will need $34 billion. The official results are due out in two days, so with any luck we’ll have an end to this ongoing leak-fest. (The WSJ puts the number at $35 billion).
Following the release of the results, the bank will have a month fo come up with a capital-raising plan, which will most likely involve conversion of government-preferred shares to commong stock.
In March and April, CEO Ken Lewis insisted that Bank of America had more capital than it would ever need. This, therefore, is just the latest in a long line of moves that would have gotten anyone else fired months ago. But let us guess: The Bank of America board still has “full confidence” in him.