[The City & My Life|E-MAIL]|GMAC, the former finance arm of General Motors, needs more capital to meet buffer requirements under the “stress tests” of banking groups conducted this year, the Federal Reserve said Monday.
GMAC was the only one of 10 banking holding companies deemed to have fallen short in efforts to raise enough capital to weather adverse economic circumstances, the Fed said in an update on the stress tests conducted earlier this year.
The Fed said GMAC is expected to meet its remaining buffer need by accessing the US bailout funds to stabilize the financial system “and is in discussions with the US Treasury on the structure of its investment.”
The Fed determined in May that 10 banking groups needed to raise a total of 74.6 billion dollars for “capital buffers” in the event of a deeper economic slump.
The stress tests examined the 19 largest bank holding companies in an effort to boost confidence in the troubled financial system.
The Fed said in May that GMAC needed 11.5 billion dollars, which could be raised through private investments, or through public aid under the Troubled Asset Relief Program approved last year by Congress.
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