U.S. May Take Ownership Stake in Banks

Treasury Department May Take Ownership Stake in Banks

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.

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