Safe you Finance

The race is on.

Facing greater scrutiny from regulators and higher losses on loan portfolios as the credit crunch hits the real economy, U.S. and European banks are scrambling to raise over $50 billion to shore up their capital.

Since the start of the financial crisis last summer, some $191 billion of capital has been raised to rebuild the balance sheets of U.S. and European banks, according to UBS research.

While the first round of fund raising had been driven by sovereign wealth funds, a second round, triggered by UBS’ (UBSN.VX: Quote, Profile, Research) $15 billion rights issue on April 1, has mainly been supported by public share sales.

Analysts and bankers are expecting another $50 billion to $80 billion to be raised over the next one to two months following RBS’s (RBS.L: Quote, Profile, Research) 12 billion pound ($23.66 billion) rights issue, as banks improve their capital positions.

It may be better to be safe than sorry.

“I know of several banks who are thinking about doing a rights issue or hybrid convertibles even though they don’t absolutely need the money,” a London-based equity capital markets banker said 500 fast cash.

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