The Obama Administration is starting to deal with economic situation. As of Monday, the administrations "put the biggest banks on notice." The United States government will become the biggest shareholder if regulators decide that the banks are not strong enough and more downturns will occur in the economy.
The government is starting to demand "direct ownership stake in major banks." One of the largest groups to receive help is Citigroup. They have received $45 billion in direct assistance. The twenty biggest banks will now be required to undergo a new "stress test" starting Wednesday February 25, 2009. This new test is to determine if every bank has enough capital to survive the economy.
If the banks come up short then the government will need to raise more capital. The government is trying to make sure that the banks strengthen their capitals by replacing shares.
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