NEW YORK — A day after
saying big U.S. banks probably needed to raise only one-fourth the
capital demanded by the government, Standard & Poors said the
nations banking crisis has “merely entered a new phase” and might not
end before 2013.

The credit rating agency said the industry is being propped up
by hundreds of billions of dollars of government support, especially
for lenders considered too important to the financial system to fail.

While efforts to spur lending, take bad assets off banks’
balance sheets, and restart the market for packaging and selling
securities may help the sector, S&P said banks will have a tough
time surviving absent a bigger capital cushion than regulators require.

“Theres nothing to say that this banking crisis can’t go on for
another three or four years,” S&P Managing Director Tanya Azarchs
said.

S&P did not immediately return a request for comment.

On Tuesday, S&P said major U.S. banks need to raise about
$18 billion of capital to protect themselves from the economic
downturn, though this amount could grow if conditions worsen.

The amount is well below the $74.6 billion that the government
last week ordered 10 of the largest U.S. banks, led by Bank of America
Corp and Wells Fargo & Co, to plug potential capital shortfalls.

These 10 banks were among 19 subjected to government “stress
tests” to gauge their readiness to withstand a particularly severe
recession in 2009 and 2010.

The other nine, including JPMorgan Chase & Co and Goldman
Sachs Group Inc, got clean bills of health when stress test results
were released on May 7.

S&P on May 4 said it may lower its ratings for 23 U.S. banks
and thrifts, including 10 that underwent stress tests, citing concern
about the industrys capitalization.

It said the 23 companies had at least a 50 percent chance of being downgraded within 90 days.

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