U.S. may take stakes in banks

[jeffrey]

Having tried without success to unlock frozen credit markets, the Treasury Department is considering taking ownership stakes in many United States banks to try to restore confidence in the financial system, according to government officials.

Treasury officials say the just-passed $700 billion bailout bill gives them the authority to inject cash directly into banks that request it. Such a move would quickly strengthen banks' balance sheets and, officials hope, persuade them to resume lending. In return, the law gives the Treasury the right to take ownership positions in banks, including healthy ones.

The Treasury plan was still preliminary and it was unclear how the process would work, but it appeared that it would be voluntary for banks...

U.S. may take stakes in banks - International Herald Tribune

[cptacek]

Oh good. Banks will work just like the Social Security office, the DMV and the FSA office...slowly or not at all.

[kork13]

Originally Posted by cptacek

Oh good. Banks will work just like the Social Security office, the DMV and the FSA office...slowly or not at all.

YAAAAAAAAAAAAAAAAAAAAAAAAAAY!!!!


Actually, they would just be taking the equivalent of a stockholder's interest in the bank. Similar to Warren Buffet's recent purchases, the USG would basically just be giving them money, and would gain some sort of high-quality stocks in the company. The USG wouldn't have any outright control over the banks, so you're concerns (at least the ones you just brought up) wouldn't actually become a problem.

[Broken Arrow]

Originally Posted by cptacek

Oh good. Banks will work just like the Social Security office, the DMV and the FSA office...slowly or not at all.

Excellent. I just can't top something like that.

[tripods68]

Maybe the 22 Federal Reserves banks already exists across this country can open up more banks within their own region. I'll go for this.