Citigroup Could Need $10 Billion in New Capital: WSJ

Citigroup may need as much as $10 billion in new capital, the Wall Street Journal reported Friday night, citing people familiar with the matter.

Like other financial institutions, the bank is in talks with the Federal Reserve about whether it needs more capital, the Journal said, citing unnamed sources.

The bank may need less capital if regulators accept the bank's arguments about its financial health, the newspaper said. Citigroup could, in a best-case scenario, have an approximately $500 million cushion above what the government is requiring.

Calls to Citigroup were not immediately returned. A spokesman for the U.S. Treasury had no comment.

The news comes as Citigroup and other banks negotiate with the government over their "stress-test" results, which are due Thursday and will include information on individual banks as well as aggregate data, CBNC reported earlier.

The government created the stress tests as a way to measure the capital needs of the nation's 19 largest banks and their ability to withstand a variety of economic scenarios.

Analysts believe the government will say all 19 banks are solvent, but that some will need to drum up more capital than others to cushion themselves as the U.S. recession deepens.

The results are expected to show that the banks must raise about $150 billion or more in fresh capital, a scenario that is likely to test the stocks of the neediest banks next week.

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