Some big banks will need more bailout bucks, President Obama and his aides said Sunday, although it is unlikely the government might need to take over any reeling institution.
“We’re confident that, yes, some are going to have very serious problems, but we feel that the tools are available to address these problems,” senior presidential advisor David Axelrod said.
Regulators are putting the nation’s 19 largest banks through so-called stress tests to determine their ability to withstand worsening economic conditions. The government hopes to make some results public in early May.
Obama, speaking at a news conference at the Summit of the Americas in Trinidad, declined to speculate in any detail on what the tests might show.
“I think what you’ll see is that, not surprisingly, different banks are in different situations. They are going to need different levels of assistance from taxpayers,” Obama said. “We’ll have more information as these stress test numbers are provided. I haven’t seen all of them yet.”
White House Chief of Staff Rahm Emanuel said first-quarter earnings reports from major banks showing they were making money was an encouraging sign. “But that doesn’t take away that some are going to need resources,” he said. “We believe we have those resources available in the government as the final backstop to make sure that the 19 are financially viable and effective.”
That does not mean going back to Congress for more money now, he added. Emanuel did not say that he had seen the tests, but said, “I do believe we have the resources to handle what the results will be.”
Asked on ABC’s “This Week” whether the Obama administration would avoid any kind of temporary nationalization of banks, Emanuel said: “I think we will be able to avoid that. . . . I believe we will not have to deal with nationalization, and that’s not the goal, nor do we think that’s the right policy objectives here.”
Axelrod pledged that the public would see test results. “I believe that the American people and the markets can handle the truth,” he said on CBS’ “Face the Nation.”