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GMAC only bank needing more bailout funds

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The Associated Press

Published: November 9, 2009

WASHINGTON - The Federal Reserve says GMAC is the only one of 19 stress-tested banks that needs more capital to withstand a future downturn.

The Fed says GMAC is expected to get more taxpayer money from the $700 billion financial bailout. The finance company is negotiating with Treasury over how much it will receive.

The test results in May found that 10 of the 19 largest banks needed an extra cushion of capital to withstand deeper losses they would see if the recession worsened. Nine of those 10 have raised the money from private investors, by selling assets or by converting preferred equity into common shares.

The stress test envisioned what would happen if unemployment reached 8.9 percent in 2009. Unemployment now stands at 10.2 percent.

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