Although the U.S. government is clearly trying to avoid nationalizing any of its major banks, there are doubts that this can be avoided, says a BCA Research note released on Tuesday.

Monday’s statement by the U.S. Treasury, Federal Reserve Board and other banking regulators about their plans for stress tests and capital injections, among other initiatives to shore up the U.S. banking system, highlights their desire to keep the country’s major banks in private hands, BCA’s note says. Yet, it adds, “We remain skeptical they can succeed.”

The regulators announced that they will begin stress testing banks this week. Those that require additional capital, but are unable to raise it from private sources, will receive an injection from a temporary capital buffer made available from the government, BCA explains.

“Clearly, the government remains hopeful that banks will be able to source private capital, that any government capital injected will be on a temporary basis, and that wholesale conversion of preferred equity into common can be avoided (by allowing banks to retire the convertible preferred shares before conversion is mandatory),” it says.

“We are skeptical, given that the private sector appears unwilling to inject further capital, especially at a point when the economy and underlying bank loan collateral values continue to erode rapidly. Moreover, it is yet to be seen if authorities can convince taxpayers why this approach serves their interests better than nationalization,” it says. “It remains unclear whether the latest initiatives can avert a nationalization of select beleagured U.S. banks.”