Investment banks look to raise new capital and calm the turbulent waves they've been riding, but the recovery is still a long way off, says Meredith Whitney, executive direct of equity research at Oppenheimer & Co.
Moreover, says the closely watched Whitney, all banks' dividends are in danger of being eliminated due to ongong, protracted difficulties.
"It's a slow bleed. I call this the agony of incrementalism. I wish I could come on here with better news," Whitney told CNBC. (See the full interview in the accompanying video.)
Financial shares took a beating Wednesday after news that Lehman Brothers may seek another possible capital-raising deal, increasing the intensity of the swirl of concern surrounding the firm.
Lehman has sought capital from Korean banksand could strike a deal later this year, the Financial Times reported.
Merrill Lynch, meanwhile, reversed its call on Lehman, downgrading its rating on the stock, after establishing the "buy" rating last week and reiterating that "buy" rating yesterday.
It was a brutal day all around for banks, with Merrill Lynch itself falling 6.6 percent.