The US bank Stress tests which were released two weeks back indicated a massive 75 billion dollar shortfall in the capital requirement of the top banks of the country. The US government gave them till till June 1st week to confirm their fund raising plan, with a execution deadline of August 2009.

But most of the banks have already spun into action and have so far raised over 55 billion dollars in the last two weeks alone, and the balance fund is expected to be raised over the next few weeks, well ahead of the government deadline.

The banks have rushed to the market and raised fund, more because of fear that any further market crash might make it difficult for them to raise funds. And the government has made it very clear that they will not provide any financial assistance to any bank for the capital shortfall.

The initial stress-Test results were relaxed post discussions with the various banks involved. The banks are rushing to raise the money from the market, and return the money borrowed from the US TARP fund, so that they can take independent decisions in terms of salaries and also key business issues.  Once the US government hold on any bank goes up, then it is bound to come under indirect control of the US FED which is not good from management independence point of view.