US regulators on Thursday unveiled the long-waited results of the government's stress tests and urged 10 of the nation's 19 largest banks to raise about US$75 billion in new capital to withstand future losses if the recession worsened.

Federal Reserve chairman Ben Bernanke said the results "should provide considerable comfort to investors and the public," noting nearly all the banks have sufficient capital "to absorb the higher losses envisioned under the hypothetical adverse scenario."

Photo taken on May 6, 2009 shows the headquarters of Citigroup Inc. in the borough of Manhattan in New York. US regulators Thursday unveiled the long-waited results of the government's stress tests, which show that 10 of the nation's 19 largest banks need a total of US$74.6 billion. [Xinhua]

"Roughly half the firms, though, need to enhance their capital structure to put greater emphasis on common equity, which provides institutions the best protection during periods of stress," he said.

More capital needed

Among the institutions needing more capital, Bank of America needs to raise US$33.9 billion in capital with Wells Forgo needing US$13.7 billion and the auto and mortgage lender GMACLLC requiring US$11.5 billion, said the Federal Reserve, which led the tests.

Meanwhile, Citigroup requirement for deeper reserves to withstand future losses is about US$5.5 billion and Morgan Stanley needs US$1.8 billion. Regions Financial Corp., Fifth Third Bancorp, KeyCorp, PNC Financial Service Group Inc. and SunTrust Banks also were told to bolster their reserves.

By contrast, Bank of New York Mellon Corp, American Express Co., Capital One Financial Corp, Goldman Sachs Group Inc, JPMorgan Chase & Co., US Bancorp, BB&T Corp., State Street Corp. and MetLife Inc do not need capital.

The revelation that Bank of America needs about US$33.9 billion to fill the hole will increase pressure on Ken Lewis, the company's embattled chief executive.

The tests also found that total credit losses for the 19 banks may reach US$600 billion in 2009 and 2010. All told, if the economy performs as badly as the worst case scenario used in the stress test, the 19 banks' losses would mount to US$950 from mid-2007 through 2010.

US regulators gave the banks that are found to raise more capital one month to come out with the plan.

"Over the next 30 days, any bank holding company (BHC) needing to augment its capital buffer will develop a detailed capital plan to be approved by its primary supervisor, in consultation with the FDIC, and will have six months to implement that plan," said a joint statement released by Treasury Ministry and other regulators.

Banks needing to augment its capital buffer will have until June 8 to develop a detailed capital plan, and until November 9th to implement that capital plan.