Federal Reserve stress tests are allowing the US government
to take voting stakes in 19 of the country's largest banks.
In stress tests released in May, Bank of America, Wells
Fargo and Citigroup were among the banks deemed insufficiently
capitalised. The Federal Reserve now requires them to raise
Tier 1 capital. In-house counsel say they have two options:
raise private capital or convert government-owned preferred
shares to common.
"Most banks are going to convert,"...