Stress test results are out...

The good news for the 19 US banks (some, like GMAC and Goldmam Sachs), of recent creation) subjected to the stress tests is that they only need to raise US$75 billion in additional capital between them. The 19 hold 2/3 of all deposits in banks in the US.

The bad news is that "Under regulators’ worst-case assumptions, the 19 banks might suffer $600 billion in losses through 2010, on top of the hundreds of billions that have already vaporized in this financial crisis. About 9 percent of all loans might sour — a figure that is even higher than it was during the Great Depression. One in five credit card loans could go unpaid, more than double the typical loss rate. Approximately one in 10 mortgages could sour. " (New York Times, May 8, 2009)