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| US banks submit funding plans | |
| (about 6 hours later) | |
| The 10 banks ordered by regulators to raise extra funds have developed sufficient plans to strengthen their finances, the Federal Reserve says. | |
| The banks were subjected to stress tests in May that found they needed additional capital to cope if the recession worsened. | |
| The Fed said it would ensure the programmes are implemented effectively. | |
| The government is also expected to announce this week which US banks will be able to repay bail-out funds. | |
| On 7 May, regulators released results of "stress tests" on the 19 largest financial institutions to see what extra capital they would need should the economy take a turn for the worse. | On 7 May, regulators released results of "stress tests" on the 19 largest financial institutions to see what extra capital they would need should the economy take a turn for the worse. |
| THE 10 THAT NEED MORE CAPITAL Bank of America - $33.9bnWells Fargo - $13.7bnGMAC - $11.5bnCitigroup - $5.5bnMorgan Stanley - $1.8bnRegions Financial - $2.5bnSunTrust Banks - $2.2bnKeyCorp - $1.8bnFifth Third Bancorp - $1.1bnPNC Financial Services - $600m Q&A: Bank stress tests | |
| Ten of those 19 banks were ordered to raise a combined $74.6bn (£50bn) to boost their cash reserves and to submit a plan on how they planned to do this by 8 June. | Ten of those 19 banks were ordered to raise a combined $74.6bn (£50bn) to boost their cash reserves and to submit a plan on how they planned to do this by 8 June. |
| They now have until early November to implement them. | |
| Bank of America was deemed most at risk, needing an additional $33.9bn. | Bank of America was deemed most at risk, needing an additional $33.9bn. |
| Reports say that the banks have collectively raised $65bn through share sales. | Reports say that the banks have collectively raised $65bn through share sales. |
| Other banks are keen to repay bail-out money they received from the government but there are fears that if banks are allowed to repay too quickly, it could jeopardise the chances of an economic recovery. | Other banks are keen to repay bail-out money they received from the government but there are fears that if banks are allowed to repay too quickly, it could jeopardise the chances of an economic recovery. |
| The government has allowed about 20 smaller banks to repay money and reports said that the Federal Reserve could now allow Goldman Sachs, JP Morgan and some other big banks to do the same. | The government has allowed about 20 smaller banks to repay money and reports said that the Federal Reserve could now allow Goldman Sachs, JP Morgan and some other big banks to do the same. |
| However, fears that early repayment could crimp lending and undermine the economy hit share prices earlier. | |
| The Dow Jones industrial average, the main US stock index, reversed early losses to end barely changed from Friday at 8,764.49. | |
| Most European markets ended the day lower, with the FTSE 100 index of leading UK shares down 0.75%, or 33.34 points points, at 4,405.22 points. |