Government regulators have issued a warning to Wells Fargo, saying the bank may not have the capital required to survive a deeper recession.

WASHINGTON – Regulators have told Wells Fargo & Co. to shore up its finances after government “stress tests” showed the bank would have trouble surviving a deeper recession.

Wells Fargo is one of several banks that regulators will force to hold larger buffers to protect them against possible future losses, according to two people familiar with the matter who spoke on condition of anonymity because of the sensitivity of the process.

Representatives from San Francisco-based Wells Fargo did not immediately respond to requests for comment Monday morning.

After originally being scheduled for release Monday, the results of the government’s stress tests now are expected Thursday afternoon. The delay comes amid aggressive lobbying from banks that were told they would need to boost their capital positions.

The question of course is “How exactly will WFC raise new capital”?   Whether management decides to convert preferred shares to common, or start beating the bushes for private investors still remains to be seen.

And speaking of common shares, as of this post WFC is trading +11.5%

Apparently being told you don’t have enough cash to survive is a promising indication of future performance.  Rally on.