Legal Commentary

Down the Path To Nationalization?

By Big Tent Democrat

NYTimes:

The Obama administration put the nation’s biggest banks on notice Monday that the government could become their biggest shareholder if regulators decide they are not strong enough to weather a deeper-than-expected downturn in the economy. In an unexpectedly assertive joint statement, the Treasury Department, Federal Reserve and federal bank regulatory agencies announced that the government might end up demanding a direct ownership stake in major banks after they undergo a tough evaluation of their strength, which is to begin shortly.

[More...]

“The capital needs of major U.S. banking institutions will be evaluated under a more challenging economic environment,” the administration said. “Should that assessment indicate that an additional capital buffer is warranted,” it continued, the banks could be required to give the government a right to acquire common shares, with voting rights.

(Emphasis supplied.) Some hard truths are beginning to be faced now it seems.

Speaking for me only

Full post as published by TalkLeft on February 23, 2009 (boomark / email).