Most test banks don't need funds-ABA

(For other news from the Reuters Global Financial Regulation Summit, click here)

(Adds Yingling, Dugan and Fed comments; byline)

By Karey Wutkowski

WASHINGTON, April 28 (Reuters) - The majority of the 19 U.S. banks that have undergone "stress tests" will not need to raise additional capital, the head of a powerful bank industry group said on Tuesday.

Edward Yingling, president of the American Bankers Association, said one or two banks may need to raise more funds, and a few will likely need to switch some of the government's preferred shares to convertible stock to build their capital buffers. The government is expected to announce the results of the stress tests the week of May 4.

"Just in talking to the banks, most of them don't need additional capital," Yingling told the Reuters Global Financial Regulation Summit.

He also said he believes regulators will give some of the largest banks the green light to repay government bailout funds in late summer or early fall.

Officials have said they welcome banks wanting to repay funds from the $700 billion Troubled Asset Relief Program, but want to make sure it will not inhibit the banking system's lending ability.