The Fed met with 19 of the top financial institutions to go over the stress test results. In some cases, some of the tests with each party took less than 30 minutes.  In addition, several of the banks, when tested, mentioned a need for more capital, but no one yet knows who those banks are.  In fact, not all of the identities of the 19 financial institutions that were subjected to federal stress tests have yet been learned. Analysts believe that they likely include regional banks with large exposures to commercial real estate in the Midwest and Southeast. Those few that are familiar with the matter said at least three banks are in this position.

Government officials believe most banks, in need, can improve their capital footing without taking money from the government bailout fund. This could be done by raising funds from private investors or converting the government’s existing investments in banks into a new type of equity that would better cover banks in case of future losses. In another scenario the U.S. could end up owning large chunks of banks, raising the specter of something akin to nationalization. Federal officials have said any such move would be temporary.

Some banks could end up requiring a cash infusion from the U.S. Treasury. For those banks  it will become very difficult to obtain private funding.  The word from the Fed from all of their meetings was to zip up about the results of the test. However, as this is Washington, we should  know just about everything by Monday or Tuesday.