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     Vikings Junior Artist Username: Vikings Post Number: 103 Registered: 12-2008 Posted From: 65.60.37.195 Rating: N/A |
NEW YORK (Reuters) - Three big U.S. banks on Monday said they would sell $5.55 billion of common stock and repay funds from the government's bank bailout program, after federal stress tests showed they can weather a deep recession without new capital. U.S. Bancorp plans to sell $2.5 billion of stock, and is also selling $1 billion of debt. Capital One Financial Corp sold $1.55 billion of stock, while BB&T Corp said it will sell $1.5 billion. BB&T also cut its quarterly dividend 68 percent to 15 cents per share to save $725 million a year, after 37 straight years of higher payouts. Chief Executive Kelly King in an interview said the decision marks "the worst day in my 37-year career." Separately, KeyCorp said it would sell $750 million of stock to help plug what regulators called a $1.8 billion capital shortfall. KeyCorp said it may take other actions, including converting other securities to common stock. The government is now ordering those banks which are the strongest to sell more common stock, repay their debt, or sell their debt. I am not really savy in this issue, but as the article says Regulators last week ordered 10 lenders, including Wells Fargo and Morgan Stanley, to raise a combined $74.6 billion. To me it is starting to sound as if they want to have these banks which are the strongest sell more to whoever has the capital, even though I understand in part it is part of Capitalism, wouldn't this make these banks less stable? Can anyone savy on this explain what this really means? because the way i see it this is like making these stronger banks more propense to going bankrupt. |
