Is anyone surprised by the Oppenheimer report that found Bank of America may need to raise up to $36 billion in capital to gets its tangible capital equity ratios in line with peers? The analysis assumes a poor first quarter, with enough write-downs to send Bank of America's ratio, of tangible common equity to risk-weighted assets, to levels well beneath other big banks, the New York Times notes.

The issue is how it will raise the additional capital. Most assume that it will not be able to sell stock. More government money is not ideal, to say the least. So really it may have no choice but to follow in Citigroup's footsteps with a massive exchange offer that will convert lots of government owned preferred shares into common shares, hiking the government's stake and diluting the heck out of existing shareholders. 

For more:
- here's the article

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