The Obama White House acknowledged on Monday that the forthcoming stress test reports on the nation's largest banks will likely reveal that several of them remain under financial duress and with toxic assets still on their books. But the White House added that it felt confident, at this juncture, that they would not need to turn to Congress to get the funds needed to prop up those still-struggling institutions.
"There undoubtedly will be banks that need more capital," spokesman Robert Gibbs said of the stress tests results, likely to be revealed on Thursday. "There have been banks in the past few weeks that have sought more capital. We believe, and the banks believe, that the first and best to get that is through the private sector. The administration doesn't believe that we need to go to Congress right now looking for more money."
Gibbs stressed during his briefing with reporters that banks should be able to raise the money they will need "either from private means or the selling of some assets." To this point it has been reported that Bank of America and Citiigroup both will need an additional $10 billion in financial support. The former is already launching efforts to raise the needed capital through private means, in an effort to make it through the stress test.
Gibbs also insisted that the public and regulators would be "pleased with the amount of transparency with which these tests" will be conducted and released. On this front, he finds himself in disagreement with the TARP's chief watchdog Elizabeth Warren, who has been decidedly unimpressed with the transparency of the process.
When asked whether the reason the president would not be going to Congress for more money at this point was because the legislative body simply wouldn't give it to him, Gibbs acknowledged that he did not "doubt that this is unpopular."
"It is unpopular here," he added. "The president didn't come here to, as he said, to run auto companies and bail out banks. But I think what is important about this process is getting a genuine understanding of what is out there."
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