The government is about to order Citigroup to raise additional capital so that it can be certified as "healthy" by their new bosses in the Obama Administration.  This Wall Street Journal piece by David Enrich and Damian Paletta shows the extent to which the federal government now controls the largest banks in the country:

The government's strong preference is for banks in need of fresh capital to raise it either through private investors or selling assets, officials say. That won't be an option for certain weaker banks, who may have to give the government big stakes in their common equity to boost capital levels. Such a move would help fill banks' capital needs but would also raise thorny questions about how large a role the U.S. might play in their daily operations.

The Obama administration is expected soon to outline what type of investor it will be in companies where it has a stake, according to people familiar with the matter. The Treasury is discussing applying different levels of governance depending on the size of the U.S. government's stake. The overall goal is to get out of the investments as quickly as is possible and minimize government intervention in banks' operations.

The outcome of the stress tests could play a major role in shaping the next phase of the U.S. government's intervention in the nation's ravaged financial system. After the results, banks will have 30 days to give the government a plan and six months to put it into effect. The banks are expected to reveal their plans next week.

Concerned about investor and depositor panic, government officials have said banks needing more capital should not be viewed as being at risk of collapse. In fact, the government has said it would not allow any of the 19 banks undergoing the test to fail.