Bank of America will need to raise between US$33.9 billion and US$35 billion in capital to maintain its financial stability, US media reported yesterday.
After days of negotiations, the government informed the banking giant it needs US$33.9 billion, the New York Times said, citing a bank executive. The amount is greater than what executives think the bank needs, however.
“We’re not happy about it because it’s still a big number,” said J. Steele Alphin, the bank’s chief administrative officer. “We think it should be a bit less at the end of the day.”
The Wall Street Journal (WSJ) meanwhile, citing people familiar with the situation, said US regulators told the Charlotte, North Carolina-based bank late on Tuesday that it needs to address a roughly US$35 billion capital shortfall.
Because the amount of capital needed exceeds what Bank of America could raise by selling more assets or shares to private investors, the bank may end up with no option but to convert government shares into common stock — meaning the US government would become one of the bank’s largest shareholders.
The federal government has already pumped US$45 billion in bailout cash into the ailing institution since the world economic crisis, which originated in the US, started to unravel last October.
The reports came ahead of results today from “stress tests” conducted by US authorities on 19 top banks, including their capital adequacy levels.
The WSJ has reported that 10 of the 19 banks subject to the tests may need to raise more capital. The exact number of banks required to raise more funds has not yet been determined, the financial daily said, but those affected could include banking giants Wells Fargo, Bank of America and Citigroup.
Meanwhile, Citigroup may have to raise between US$5 billion and US$10 billion in new capital to meet a US government requirement that it holds up to US$55 billion in capital, the New York Times said, citing people familiar with the matter.
The US government told Citigroup Inc that it would need between US$50 billion and US$55 billion in capital based on the results of government stress tests of banks, the newspaper said.
Citigroup is expected to need to raise capital as insurance against any further downturn in the economy, it said.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS