Tim Geithner says:
tg-94: Treasury Secretary Tim Geithner Written Testimony: Congressional Oversight Panel: Currently, the vast majority of banks have more capital than they need to be considered well capitalized by their regulators...
I know that I was not pleased to hear that. The failure to assure us that the vast majority of bank assets are in well-capitalized institutions seemed to me to speak volumes. Nobody ever thought that the vast majority of banks are not well capitalized--it's the highly leveraged New York high flyers.
Yet the market liked it.
Kiran Stacey in the FT:
FT.com / Markets - Financials rise as Geithner calms bank fears: US stocks rebounded on Tuesday as Tim Geithner, the Treasury secretary, allayed fears over the health of the banking industry. Mr Geithner told a congressional panel that “the vast majority” of banks had more capital than needed, which encouraged buyers to enter the market after Monday’s bruising sell-off, during which the financial sector dropped 11 per cent.
Citigroup picked up 10.2 per cent to $3.24, helped by comments from its chief executive Vikram Pandit that it would “repay every dollar” of bail-out money. Bank of America, which fell nearly 25 per cent on Monday following warnings in its results about deteriorating credit conditions, gained 9.2 per cent to $8.76...
