US considers stake in some domestic banks

[Thinking Man's Idiot]

US May Take Ownership Stake in Banks



The Dirty Details of Voter Purges



Global Crises Compound Refugees' Woes





Economics Seen Bolstering Case To Protect Nature



World Is Moving Towards Banning Death Penalty, says Reprieve

US considers stake in some domestic banks

(Thursday 09 October 2008)






THE US government is considering partial state ownership of some of the country's domestic banks in response to the global capitalist crisis.

An administration official, who spoke on condition of anonymity because no decision has been made, said that the $700 billion (£400bn) banking bail-out passed by congress last week allows the Treasury Department not only to pour public money into financial institutions but to receive shares in return.
This official said that all the new powers granted in the legislation were being considered, as the administration seeks to deal with the banking and credit crisis that has caused the biggest upheavals on Wall Street in nearly seven decades.
Many supporters of this approach, such as Democratic Senator Charles Schumer, argue that taxpayers would be beneficiaries of it because the government would receive an equity stake in the bank in return for providing the capital.
"This idea would, at a minimum, complement the administration's planned approach of buying up troubled assets and may prove to be the most promising tool of all in Secretary Paulson's kit," Mr Schumer said.
Treasury Secretary Henry Paulson told reporters that he was acting quickly to implement the bail-out.
"We will use all the tools we've been given to maximum effectiveness, including strengthening the capitalisation of financial institutions of every size," he said.