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Skip to comments.U.S. May Convert Banks’ Bailouts to Equity Share
Posted on 04/19/2009 11:19:02 PM PDT by cdchik123
WASHINGTON President Obamas top economic advisers have determined that they can shore up the nations 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 governments existing loans to the nations 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.
While the option appears to be a quick and easy way to avoid a confrontation with Congressional leaders wary of putting more money into the banks, some critics would consider it a back door to nationalization, since the government could become the largest shareholder in several banks.
(Excerpt) Read more at nytimes.com ...
and if you already own stock, its going to become very very diluted.
the nationalization of the banking industry
We are the government and we are here to help you. /s
Ahhh, those persnickety ol’ checks and balances, so cumbersome, so outdated. Those old white guys just clogged up the works with all that nonsense. \s
More like worthless when Obama, et al, gets finished.