What's Clear
What clear is the bank regulators do not trust claims from banks they are well capitalized. Citigroup’s claim was preposterous. Shortly after Citigroup last proclaimed it was well capitalized, the Fed stepped in to guarantee $301 billion of Citigroup debt and an additional $118 billion of Bank of America debt. See Triage For Troubled Assets for more details.
That the Fed had to offer those guarantees is proof that both banks are insolvent. I suspect there is not a single solvent bank in the top 18. But we will not know because Geithner will not publish the results.
What’s equally clear is Geithner is grasping at straws. He has no idea what he is doing because if he did he would be willing to talk about it. There may be “strings” attached to more bailout money, or not. Who knows? What Strings? Who knows?
