Yesterday on NPR I talked about the possibility of big banks like Citibank or Bank of American potentially being nationalized, or taken under government control:
My NPR appearance, Feb. 23, 2009
At the tail end I was asked whether I thought ultimately that would happen, and I answered "no", with a few caveats. It's pretty obvious that the government is likely to be a major shareholder of at least Citi in the near future, as it already has the ability to control as much as 40 percent of the bank's common shares, and Citi's CEO was at the White House yesterday for meetings. I don't think that the government wants to be in the business of running one, or all, of the major banks in the US over an extended period of time, though.
My guess: they'll take big stakes now, clean up the books, and then sell the shares back to private ownership. Let's just hope the taxpayers get a nice payback when that happens, something like selling off the bank stock at a profit to support high-speed rail.
1 comment:
I have what might be a stupid question. Why should I care about the nationalization of banks? What's the benefits and what's the negatives.
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