U.S. May Convert Banks’ Bailouts to Equity Share

President Obama’s top economic advisers have determined that they can shore up the nation’s banking system without having to ask Congress for more money any time soon, according to administration officials.

In a significant shift, White House and Treasury Department officials now say they can stretch what is left of the $700 billion financial bailout fund further than they had expected a few months ago, simply by converting the government’s existing loans to the nation’s 19 biggest banks into common stock.

Converting those loans to common shares would turn the federal aid into available capital for a bank ”” and give the government a large ownership stake in return.

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Posted in * Economics, Politics, Economy, The 2009 Obama Administration Bank Bailout Plan, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--

2 comments on “U.S. May Convert Banks’ Bailouts to Equity Share

  1. Jeffersonian says:

    The Bard will forgive me as I note that nationalization by any other name would smell just as foul.

    Large equity positions in banks, large equity positions in auto manufacturers and declaring dominion over the very gases we exhale. Is it bad manners to point out this is a wee bit, uh, totalitarian in nature?

  2. Creedal Episcopalian says:

    And here I was worrying about fascism. When do they open the labor camps?