Financial Winners and Losers: BofA

Financial stocks ended Thursday's session mostly lower, one hour before the government releases the results of its stress tests of banks, as investors took profits following a call for increased regulation a Federal Reserve official.

During a speech at the Chicago Federal Reserve Bank, Fed Chairman Ben Bernanke said the financial crisis has revealed weaknesses in both private-sector risk management and in the public sector's oversight of the financial system.

"It is imperative that we apply the lessons of this experience to strengthen our regulatory system, both at the level of its overall architecture and in its daily execution," Bernanke said. "Indeed, although reform of the current system is necessary, much can be done within the current framework."

Bernanke's remarks come one day after Federal Deposit Insurance Corp. Chairman Sheila Bair told the Senate Banking Committee she would like to see a systemic-risk council to prevent banks from becoming "too big to fail" and from posing a threat to the entire financial system.

Meanwhile, a report in The Wall Street Journal said that Bank of America (BAC), Citigroup (C), Morgan Stanley (MS), Regions Financial (RF), State Street (STT), Wells Fargo (WFC) and GMAC, the financing arm of General Motors (GM), will be directed by the government to bolster their capital levels by a combined $65 billion.

Any bank needing more capital will have until June 8 to develop a plan and must implement it by Nov. 9, the Journal reported.

Meanwhile, the report said JPMorgan Chase (JPM), Goldman Sachs (GS), MetLife (MET), American Express (AXP), Bank of New York Mellon (BK) and Capital One Financial (COF) won't be told to raise additional capital.

Among those reported to need new capital, only Bank of America finished higher, rising 6.5% to close at $13.51. On the other hand, Regions Financial dropped 10.3% to $5.23, Wells Fargo slid 7.8% to end the day at $24.76, Morgan Stanley lost 4.8% to finish at $27.14, State Street slipped 3.3% to $37.83, and Citigroup shed 1.3% to $3.81.