Is the industry out of the woods? Not yet, according to Oppenheimer analyst Meredith Whitney. As Reuters reports, she's telling clients that top banks are still plagued by capital issues, despite the TARP funds distributed last year. Indeed, capital ratios "will be meaningfully lower in the fourth quarter (of 2008) versus post TARP pro forma levels," she wrote to clients. 

The issues are rising loan loss reserves--Bank of America's loan loss provision for the fourth quarter, for example, could be $6.7 billion vs. $3.3. billion a year earlier--coupled with additional mortgage-related securities ratings actions. All this will pressure capital ratios. Such analysis suggests how tiny the TARP funds really were relative to the overall situation.

For more:
- here's the Reuters article

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