Regulators: Wells Fargo needs to raise capital

Regulators have told Wells Fargo & Co. (WFC) to shore up its finances after government "stress tests" showed the bank would have trouble surviving a deeper recession, The Associated Press reported today.

Wells Fargo is one of several banks that regulators will force to hold larger buffers to protect them against possible future losses, according to two people familiar with the matter who spoke on condition of anonymity because of the sensitivity of the process.

Representatives from San Francisco-based Wells Fargo did not immediately respond to requests for comment Monday morning.

After originally being scheduled for release Monday, the results of the government's stress tests now are expected Thursday afternoon. The delay comes amid aggressive lobbying from banks that were told they would need to boost their capital positions.

The stress tests of the 19 largest financial firms are a centerpiece of the Obama administration's plan to stabilize the banks. The tests estimate losses the banks would face in a "what-if" scenario that includes 10.3% unemployment and a 22% drop in home prices during the next two years.