Following the federal government’s directive of plugging capital holes at large banks, Wells Fargo & Co. (WFC) and Morgan Stanley (MS) raised $15 billion in stock and bond sales on Friday.

In the results of its stress tests revealed late on Thursday, the Federal Reserve concluded that 10 of the largest financial institutions in the country would have to raise $74.6 billion to ensure solid capital cushioning against future losses. While some like JPMorgan Chase (JPM) and Goldman Sachs (GS) managed to pass muster, Bank of America (BAC), Wells Fargo and Morgan Stanley were among the prominent ones found to be in urgent need of capital.

Treasury Secretary Tim Geithner also showed confidence in the ability of banks to tap capital from private sources and without further support from the government. Wells Fargo and Morgan Stanley demonstrated today that his faith was grounded in reality, with both the companies managing to price offerings at the top of their expected range on heavy oversubscription by large institutional investors.

Wells Fargo sold shares worth $7.5 billion, about 25% more than its original expectation, while Morgan Stanley raised $7.5 billion from stocks and bonds, more than $2 billion of its initial plan. Old ally Mitsubishi UFJ Financial (MTU) agreed to help New York-based Morgan Stanley once more by purchasing 25 million shares at $24 each.

The government has given banks a deadline of six months to cover their capital shortfalls or accept federal intervention that could even prompt management changes. While Bank of America is selling 1.25 billion shares and some assets, Citigroup (C) will convert $5.5 billion of preferred stock into common equity to meet the challenge. Other banks that do not need additional capital are now planning to repay funds received from the Troubled Asset Relief Program as soon as possible.

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