The 10 banks which were deemed tobe risky by the US Government and which were told by the regulators to raise extra funds have come back with good plans to strengthen their finances, the Federal Reserve says.

The banks were subjected to stress tests in May that found they needed additional capital to cope if the recession worsened. The Fed said it would ensure the programmes are implemented effectively.

The government is also expected to announce this week which US banks will be able to repay bail-out funds. On 7 May, regulators released results of “stress tests” on the 19 largest financial institutions to see what extra capital they would need should the economy take a turn for the worse.