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Absent fresh details on how the nation’s 19 largest banks fared in a new government test of their health, analysts are turning the spotlight on a handful of major regional banks that they reckon may be the next weak links in the financial industry.
On Friday, the Federal Reserve reported that the banks whose books it had analyzed recently had enough capital to offset a raft of new losses, reinforcing the belief that the government would support the largest banks even if their financial health eroded, and buoying the stock market.
But the agency warned that banks would need a new cushion of financing on top of the current minimum levels as a buffer against higher losses if the economy worsened. That guideline, analysts say, could force at least a handful of banks, including several regional lenders, to sell large amounts of common stock to the government or private investors.
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