From CBS Marketwatch: Bernanke urged financial firms to raise more capital.
Banks and securities firms should continue to raise capital to help them navigate the treacherous waters of the financial market turmoil, Federal Reserve Board Chairman Ben Bernanke said Thursday. "I strongly urge financial institutions to remain proactive in their capital-raising efforts,"
Permit me to translate that into plain speak.
"Raising" capital either via debt or issuing more shares equals either increasing the risk, or diluting the current equity holder's stake.
Either way, this is a fairly explicit acknowledgment that the current owners are fooked with a capital F.
Dr. Bernanke might also want to review the concept of a Balance Sheet Recession.
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