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The new capital was needed to allow GMAC to convert itself into a bank and lower its borrowing costs.
It was never easy for regulators to determine how much capital was needed, but it became more difficult as financial innovations spread.
He also defended the soundness of the bank tests, saying estimates regulators used to determine how much capital was needed as a buffer were "appropriately conservative".
That came after she concluded she had been deceived about how much trading was going on and became upset by wildly varying estimates of just how much "risk-weighted capital" was needed to back the trading positions.
That allowed banks to use their own models — or credit ratings from Moody's, Fitch and Standard & Poor's — to determine just how risky an asset was, and therefore how much capital was needed.
Mr. King said Thursday that the additional capital was needed because even though the sentiment in financial markets had "improved a little," global growth remained weak and "significant adjustments" on debt in the euro zone were still expected.
Similar(49)
More capital is needed.
Long-term, strategic and "patient" capital is needed.
Regulators now have a better idea of how much capital is needed to survive a meltdown.
Higher investment and capital is needed to utilize this spare capacity.
At 13% unemployment less than $500 billion in new capital is needed.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com