The results of the stress tests will officially be released this afternoon, but with all of the information that has already leaked about them, the end result is going to be about as anticlimactic as The Watchmen. This morning's Wall Street Journal identifies a number of the banks regulators have directed to come up with more capital: Bank of America tops the list with its gargantuan $34 billion hole, and is followed by the usual parade of suspects including Citigroup ($5 billion), Wells Fargo & Co. ($13 to $15 billion), GMAC ($11.5 billion), and Morgan Stanley ($1.5 billion), and there are probably not going to be many more surprises. But things are just getting exciting for the CEOs of troubled banks, for whom the race for survival just got personal.
According to the Federal Reserve:
As part of the 30-day planning process, firms will need to review their existing management and Board in order to assure that the leadership of the firm has sufficient expertise and ability to manage the risks presented by the current economic environment and maintain balance sheet capacity sufficient to continue prudent lending to meet the credit needs of the economy.
For Bank of America's Ken Lewis and Citigroup's Vikram Pandit in particular, who have spent much of the year demonstrating insufficient behavior (Lewis through his decision to save himself and screw over shareholders with acquisition of Merrill Lynch; Pandit with his never-ending private-plane and Zen-garden kerfuffles), this is sure to be an exceptional challenge. But take heart, gentlemen: If a crooked-gaited, Canadian horse ridden by a jockey with a bum leg can shoot out of nowhere and win the Kentucky Derby, nothing is impossible.