Citigroup ( C) may already be well on its way to raising the capital the federal government thinks it needs to, but it may need to pick up the pace.

The Wall Street Journal reported on Tuesday that both Bank of America ( BAC) and Citi have been told by regulators they may need to raise more capital based on early results of the government's so-called stress tests , according to people familiar with the situation.

Executives at both banks are objecting to the preliminary findings, the newspaper reports, and the two banks are planning to respond with detailed rebuttals. BofA, which has a shareholder meeting scheduled for Wednesday, is expected to make its appeal immediately.

Citi wants the government to acknowledge its recent efforts to sell off businesses and raise capital, the Journal says. Harlan Platt, a finance professor at Northeastern University, says that asset sales are going to have to be a "significant piece" of any capital Citi raises.

"Seeing success they're having in the auto industry, they're going to take a very similar tactic with these 19 banks that are too big to fail," Platt says. The government is "going to light some fires under some butts and force people to sell off assets that have value as opposed to selling off assets that have limited value."

Citi has been slimming down its expansive businesses in efforts to rein in expenses since the credit crisis began, but under pressure from regulators and investors it has taken even more drastic steps as losses mount and capital became thin.

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