Treasury: Major banks have raised $56 billion

Treasury secretary Timothy Geithner on Wednesday said major banks have raised $56 billion since the results of the stress tests were released reflecting a need for more capital.

Geithner as he before the Senate Banking Committee said that the financial system had begun to “heal,” and that the Treasury would soon be introducing the next phase of its financial rescue effort — the plan to team up with private investors to buy billions of dollars in toxic assets from banks.

“There are important indications that our financial system is starting to heal,” Mr. Geithner told lawmakers. He also cautioned that the time for talking about an “exit strategy” for the government had not yet come.

Treasury Secretary Timothy Geithner said Wednesday that major banks had raised $56 billion since stress tests showed several in need of more capital. A day before Bank of America reported raising capital of $13,47 billion through the sales of ordinary common stock.

Last month 19 major banks took the stress tests and it was found that 10 banks need more capital after the stress tests, these institutions have a June 8 deadline to come up with a plan on how it will meet its capital requirements.