Stress Tests May Stress Banks’ Ability to Raise Funds

According to a report on Bloomberg.com, stress tested banks might find it difficult to raise funds due to the surge in bad assets this past year at the largest lenders.

Bad assets at 13 of the largest U.S. banks increased 169 percent on average from a year ago, according to first-quarter data compiled by Bloomberg.

The stress tests will focus on 19 of the largest banks and will focus in part on loan quality as a measure of health. According to the article, a report from KBW Inc. said lenders may have to raise $1 trillion in capital due to losses and they may have a hard time convincing investors to give them the cash.

For more, visit Bloomberg.com.