Wednesday, June 3, 2009
Banks Raising Capital identified in Stress Test - Investor confidence regained
Many of the banks have raised money through selling common shares, converting preferred to common and selling debt to raise capital cushion identified by stress test. The speed at which the banks were able to raise capital is remarkable. Although that is not particularly helpful to the stock price due to dilution, it demonstrates the fact that the investors are confident in the capital markets. It is the most important part of the recovery.