U.S. Megabanks Need Additional $869 BILLION In Cash To Meet Greenspan Target

In his testimony before the Financial Crisis Inquiry Commission this week, Alan Greenspan suggested that Bear Stearns and Lehman Brothers would have survived the crisis with 15 percent equity capital. "Extrapolated across other major banks," Rolfe Winkler writes, "the 15% figure implies they'd have to raise nearly $900 billion, a truly stupendous figure."

But while 15 percent may be a difficult standard to meet, "regulators should err on the high side" nonetheless. And "in setting a very high bar, Greenspan may have done regulators a favor," Winkler argues, by giving "them cover to raise capital standards higher than they otherwise would."

Read the whole story: Reuters

Comments

[freespeech2]

11:42 AM on 04/11/2010

Weren't the recent "stress tests" a check on the banks' capital reserves? What ratio was used for that?

[nanderson65]

06:28 PM on 04/10/2010

just another 869 Billion to meet our goal

... of stealing everything!

[hellboundtrain]

02:43 PM on 04/10/2010

They don't need anything
but to go belly-up.

[realitytrumpsbull]

12:44 AM on 04/11/2010

Seconded.

[pattithepolitico]

10:13 AM on 04/10/2010

I don't think so!

[Kye154]

05:49 PM on 04/09/2010

The megabanks need more cash? Then who needs them? Sounds like another one of their fraudulent rackets. Let them sink! Make them lay off all those incompetent people in the banking industry and give them a taste for what it is like to not have a job, or their luxurious homes foreclosed on, or what it is like to be on austere unemployment benefits.

[ThePeacemakers]

03:04 PM on 04/09/2010

Why is Greenspan still setting "targets"?
Can his old butt just go away now?

If you want to shrink these suckers, don't give them the money. They will be forced to wind down in increments. They won't be able to make their "too big to fail" plans without US taxpayer guarantees.
If their dumb risks isn't backed by the US Treasury, they will have to revamp.

[realitytrumpsbull]

12:45 AM on 04/11/2010

Better yet, even, if some of the people that run these places actually get incarcerated for getting too creative with the financing.

[Janine547]

02:36 PM on 04/09/2010

Write the check. We're already printing money like toilet paper, with as much value.

[pjwrites]

02:34 PM on 04/09/2010

Another $869 billion, eh? What about the trillions they've already received, what did they do with that money? I guess that's none of our business, right?

How about these little banksters just take this one out of their own bank accounts then? They got billions in bonuses and salaries, let them give those billions up instead of asking the taxpayer to guarantee their debt for them.

[realitytrumpsbull]

12:46 AM on 04/11/2010

That's where the political pressure comes in, and like it or not, Wall St. has the money to basically all but tell Congress what to do.

[lightningbolt]

02:12 PM on 04/09/2010

These banks need to be winded down and put through bankruptcy, and their executives should be arrested and put on trial for fraud.