Telling piece in tomorrow's FT:

US bank shares hit a near 17-year low on Thursday on rising fears the government will have to nationalise troubled institutions such as Citigroup and Bank of America, wiping out investors and taking control of a large portion of the financial sector.

Bank of America shares slid 14 per cent to $3.93, their lowest point since 1984. Shares in Citi were down 13.8 per cent, closing at $2.51, their lowest since 1991. The KBW banks index fell to its lowest level since 1992. In the debt markets, Citi’s bonds were trading at distressed levels.

People close to the situation said that some banks were in talks with regulators over plans that would provide them with another capital injection but stopped short of an outright nationalisation.

Also, this is really interesting:

The Treasury expects that the [stress] tests will indicate most US banks remain viable today although they could potentially be vulnerable in stress scenarios. The government would support such banks by buying convertible preferred stock. However, the authorities also envisage the possibility that stress tests will reveal that some banks are so weak that they would have to be nationalised through the Federal Deposit Insurance Corporation.

I guess it depends what you mean by "most." Hopefully it's not a definition that includes Citi and Bank of America...

--Noam Scheiber